In summary, the Government is establishing a framework to enable private firms to offer consumers energy efficiency improvements to their homes, communities and businesses at no cost upfront, and recoup the payments through a charge in instalments on the energy bill.
The Government intends that Green Deal UK will revolutionise the energy efficiency of British properties. The Green Deal plan is an innovative financing mechanism allowing consumers to pay back the cost of their improvements through their savings on their energy bills. This means consumers can see the Green Deal charge alongside the reductions in energy use which generate savings to the ultimate energy bill. Another advantage is, if the consumer is then to move out and cease to be the bill payer at the property, the financial obligation does not move with you, but will move to the next bill payer - the charge is only paid whilst the benefits are enjoyed meaning it does not stand as a conventional loan.
The only rule that stands with The Green Deal is that the expected financial savings for the customer must be equal to or greater than the costs attached to the energy bill. This is known as the Golden Rule.
The Green Deal removes many of the barriers faced by householders and businesses wishing to install energy efficiency measures. By making investments possible at no upfront cost (repaid through energy bills) it increases the incentive for owners, occupiers, tenants and landlords to take action.
A Green Deal Assessor's role is to provide the customer with a Green Deal Advice Report, detailing recommended measures and indicating whether these are likely to pay for themselves through reduced energy costs. This puts the consumer in a position to get quotes from Green Deal Providers, which if accepted will lead to signing a Green Deal Plan.
In addition to the Green Deal Advice Report, clients will receive an Energy Performance Certificate (EPC) and Occupancy Assessment (OA).
A Green Deal plan is a contractual agreement setting out the cost of the work, rate of interest, terms and the fixed repayments amount which is only available from the Green Deal Provider once a written quotation has been accepted.
The Green Deal Plan has been set out as a new type of unsecured loan attached to a property, repaid via a charge on the energy bill. Annual statements are sent out detailing how much has been paid off and the remaining balance.
Even though you are signed to a contract, switching energy supplier is still possible as the Green Deal Plan payments will be collected by the new supplier.