Green Deal

The purpose of the Green Deal is to encourage as many people as possible to take measures to make their homes more energy efficient and it will achieve this by providing all of the upfront finance for such measures by way of a loan.

It is the Government’s intention that there be no restrictions on who can apply for finance through the Green Deal so potentially all of the UK’s 26 million households could take advantage. It is not means tested in the way that most benefits are and neither an applicant’s current credit commitments nor his past credit history will be taken into account. Applicants do not need to own their home to benefit and where a property is rented, either the landlord or the tenant could apply.

There are no details as to the process for making an application at the moment but what is known is that an assessment of your home, to establish what measures would be most effective, will be required. The cost of this should be included in the loan.

Legislation: Green Deal requires new primary legislation – it will be “at the heart” of the Energy Bill that will be introduced later this year.  This is needed to create the legal framework for the financing arrangement.

Measures: Green Deal is about financing straight energy efficiency measures.  He appeared to rule out Green Deal financing for microgeneration and it is also unclear whether it will cover heating system upgrades – one could hardly justify 25 year financing on a replacement boiler.

Coverage: Green Deal will cover both homes and businesses – especially small and medium-sized ones.

Timing: Green Deal isn’t going to have any impact in the short-term.  It looks as though the intention is that Green Deal financing and the revised supplier obligation (CERT) will both come into force at the end of 2012.