Green Deal for homes
With over 6.1 million homes lacking even basic insulation, it is no wonder that homes across the UK feel cold and draughty. The government have identified a need to reduce carbon emissions, and in 2008 legislated a reduction of carbon emissions by 34%, in comparison to 1990. In order for the UK, as a whole, to reach this ambitious yet achievable target the government are introducing the Green Deal.
10 million, if not more, homes in the UK will benefit from the Green Deal. The Green Deal itself will enable homes across the UK to be retrofitted with energy efficiency measures. These measures will be financed by Green Deal Providers, meaning that there will be no immediate cost to the consumer. The finance provided can be up to a total cost of £10,000, though consumers are able to part fund the energy efficiency measures, should they wish. When consumers sell or leave their homes they will no longer be liable for repayments, any subsequent owner will have to commit to obligations.
The Green Deal for homes contains strict criteria that must be met before any funding is provided. Known as the ‘Golden Rule’, it outlines that any improvements on the house must not exceed the value of the potential savings that can be made. The Golden Rule also states that the total length of repayments must not exceed the life expectancy of possible measures. This will help ensure that homes do not receive measures that would not be financially viable.
There will not be an unlimited amount of finance provided however, and any energy efficiency measures that could be installed on homes must be approved under the Green Deal. The measures that will be made available for homes include condensing boilers, solid and cavity wall insulation and even micro generation. Homeowners will have some say in deciding what they want installed in their homes, though a Green Deal Advisor and Provider will have to agree.
The Green Deal will be made available to not only homes, but businesses too. The government are putting much more emphasis on the Green Deal for homes, however. This could be attributed to the fact that the scale of efficiency problems in homes is significantly larger than that of businesses. The Green Deal for homes will differ slightly to the Green Deal for businesses. For example, it is proposed that the government will allow the Green Deal Finance provided to businesses to be exempt under the Consumer Credit Act (CCA), reducing administrative burdens.
The Green Deal will have a major impact on the sustainability and efficiency of homes. Reducing energy leakage and improving the overall efficiency of homes. Though there is some scepticism as to whether it will have any considerable impact, the government have developed, with industry professions, a number of protections. These protections will prevent any poor practices and enable consumers to receive a standardised service throughout every process associated with the Green Deal. The combination of the unique financing structure and the ability to conduct renovations at no immediate cost will entice and encourage consumers to register under the Green Deal.