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The Green Deal

Steve Adelizzi

Agenda • • • • • • • •

Background and where are we now? Summary of Green Deal Customer Journey The rented sector Key players in delivery The operational model Is it all good news? What can we do?

Background and context 

The Energy Bill included a provision to create a framework for a national energy efficiency retrofit scheme – Green Deal.

Warm Front, CERT and CESP ending and fuel poverty is increasing.

The Bill also included a provision for a new Energy Company Obligation (ECO).

Pressure on central funding – could be no funding!

Too many schemes and a legacy of barriers

What is Green Deal? • A scheme to improve the energy efficiency of homes and businesses in the UK! • A ‘loan’ scheme with no up-front costs and re-paid through energy savings. • Repayment through a charge on the energy bill – finance ‘tied’ to the energy meter and stays with the ‘property’ - even with a new occupant • A market mechanism, funded through private capital. • A ‘one stop shop’ route to other schemes. • Measures chosen through a ‘Golden Rule’

Progress so far • • • • • •

Dec 2010 – Introduced to Parliament Now – informal consultation Sept 2011 – Secondary legislation Sept 2011 – Spring 2012 formal consultation Sept 2012 Launch It’s very early days but things are gathering pace

The ‘Golden Rule’ • The cost of the loan repayments will always be lower than the expected fuel bill savings • The repayment period will always be less than the expected life of the measures.

Example Measure = £1000 Lifetime savings = £1200 Lifetime savings = £800 other Householder in fuel poverty -

Yes – Green Deal finance No – referral to ECO or No – referral to ECO or other

Customer Journey

Marketing and sign up

Home Assessment

Measures and finance plan agreed



Change of tenancy

Marketing & Sign-up • • • • •

National marketing and publicity Retailers, DIY, supermarkets, home improvements Estate agents, EPC assessors? Independent advice and sign-up? Local Authorities?

Home assessment • • • • • •

Individual assessments (home visits) are necessary Measures, advice, finance plan Codes of practice Local knowledge needed Local authority involvement? An iterative process?

What measures? YES

Green Deal




Rule NO


Finance plan • Only the Green Deal plan will finance thru the energy bill • The Provider/Assessor to make the offer • Consent is needed by the ‘owner’ • It is effectively a loan – a charge – with interest • There are implications for non-payment • A ‘bundled’ package is being considered

Installation • • • • •

High level of certification and warranty Green Deal brand and Quality Mark Very short timeline for installation Co-ordination of the ‘wider’ Green Deal package Referral to EPC

Repayments & Moving on • • • • • •

A charge on the energy bill No restriction to switching supplier Charge passes to new occupant The new occupant must agree/accept The EPC is the main vehicle for disclosure The option to ‘re-negotiate’ is being considered

The rented sector • • • •

Not straightforward Half properties are not a decent home standard Private rent likely to be 4 times colder than social rent So landlords given to 2013 to see how they respond but regulation will be a last resort • Complications due to multi-tenure

Key players in Marketing delivery & Energy


Independent Advice

Company Scheme EPC Process

Provider &




Funders Funding Vehicle

Is it all good news? • • • • • • • • •

Some concerns about the role of dominant retail players Interest rates (2% - 6%) Council tax rebates and cuts in stamp duty 100,000 new jobs (Chris Huhne) Paybacks are determined by the cost of the measure ‘Re-bound’ effect estimated at 15% - evidence is 40% Rises in energy bills Fuel poverty New occupants with different consumption patterns

What’s needed? • All the components in the delivery model • Secondary legislation (Autumn 2011) – Bill payment process – EPC process – Consumer Credit Act process • Green Deal brand, kite marks, warranties etc • A great deal more clarity from DECC • Energy Company Obligation (2013?)

What can be done now? • • • •

Understand, discuss and explore partnerships Joint communication and dialogue Design and run a ‘pilot’ scheme A full Green Deal in parallel with the legislative process

What can be done now? • • • •

Understand, discuss and explore partnerships Joint communication and dialogue Design and run a ‘pilot’ scheme A full Green Deal in parallel with the legislative process

The_Green_Deal .. Herts Council PPT