Green New Deal
As of 2020 the UK’s domestic carbon emissions, in accordance with the Climate Change Act 2008, must be reduced by 34%, compared to 1990. Though highly ambitious, this target is far from impossible to reach. In response to this target the government plan to introduce a new, innovative scheme known as the Green Deal.
The new Green Deal will overhaul not only the UK’s property stock energy efficiency, but also the way in which finance is provided to consumers. The new scheme will enable home and business owners to plan, finance and install energy efficiency measures at no prior cost. This is because finance of up to £10,000 will be provided and the costs are the added onto the consumers’ energy bill. Any savings made through the energy efficiency measures should cover the cost of repayments.
At the Heart of the Green Deal is a new finance mechanism that is intended to enhance the attractiveness of the Green Deal. The structure will be referred to as Green Deal Finance. The finance structure is unique in a sense that any loan provided is linked to the property and its current occupants, not the individual who originally secured Green Deal Finance. Should the individual who initially registered for the new Green Deal leave the property, for example, any subsequent occupants are the responsible for repayment obligations.
The new scheme will not leave consumers vulnerable though; there will be a number of guidelines, criteria and frameworks in place that will prevent the new scheme from being abused. The Golden Rule contains two criteria that must be met before consumers are offered a Green Deal. The first criterion states that the total cost of improvements should not exceed the potential savings that could be made. The second criterion states that the life expectancy of any measures should be equal too, or greater, than the length of repayments. The government have created the Golden Rule to prevent consumers from being left out of pocket by signing up to the Green Deal.
Three primary roles will be created once the Green Deal is launched. The parties involved within these roles will constitute the majority of the Green Deal workforce. Green Deal Assessors will be the first party involved in the new scheme. Assessors will be responsible for attending and evaluating properties energy efficiency. An updated version of the widely available EPC will be produced and he, or she, will recommend a variety of measures that could improve the properties energy efficiency. Green Deal Providers, contacted by the consumer, are then able to provide a package of measures that would suit the client’s needs, taking into account factors such as potential savings, The Golden Rule and existing energy bills. Once the package has been agreed upon the finance is released and Green Deal Installers will then be free to conduct the renovations.