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GUIDE TO THE GREEN DEAL


Green Deal Overview What is the Green Deal? The intention of the Green Deal is to give homeowners a method of ensuring their home is energy efficient without the upfront costs of improvements. The Green Deal is the Government’s carbon emission reduction policy. The purpose of the Green Deal is to encourage as many people as possible to take measures to make their homes more energy efficient; installing loft, wall and roof insulation, double glazing, heating, renewable technologies such as solar panels and other energy efficient home improvements. It will aim to achieve this through the consumers setting up a Green Deal Plan with a Green Deal Provider. All upfront finance for such measures, by way of a loan attached to the home, will be paid back via the consumer’s savings on their energy bills.

£3 Billion of energy lost each year through poorly insulated homes and businesses (Source: HM Government)

Average energy loss in UK homes

15%

25%

Roof Windows

15%

Walls

10%

Draughts Floor

35%

(Source: energysavingtrust.org.uk)

Is the Green Deal a good idea? Yes, as awareness of the Green Deal gains momentum the public should become more informed of the need to think about energy saving home improvements which will benefit us.

Estimated energy bills to increase by

£340

per annum

(Source: Ofgem)

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Guide To The Green Deal


Products covered by the Green Deal Heating, ventilation and air conditioning

Condensing boilers Heating controls Under-floor heating Heat recovery systems Mechanical ventilation (non-domestic) Flue gas recovery devices

Building fabric

Cavity wall insulation Loft insulation Flat roof insulation Internal wall insulation External wall insulation Draught proofing Floor insulation Heating system insulation (cylinder, pipes) Energy efficient glazing and doors

Lighting

Lighting fittings & controls

Water heating

Innovative hot water systems Water efficient taps and showers

Microgeneration

Ground and air source heat pumps Solar thermal Solar PV Biomass boilers Micro-CHP

Who can enter into a Green Deal agreement?

- Homeowners

Guide To The Green Deal

- Tenants - Landlords

- Business Owners

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Q&A’s What is the main benefit of the Green Deal?

It allows people to upgrade their homes without any upfront financial outlay* and enter into a different kind of credit agreement.

What is different about the credit agreement?

Finance will be arranged through a Green Deal Provider who will fund the installation of home improvements and energy saving projects through a Green Deal Plan. The debt for the home improvements is against the house and not the individual householder. If a homeowner sells their house the debt remains with the house and becomes the responsibility of the new owner.

How much can they borrow and over what period?

Up to £10,000 and can be paid back over a period of up to 25 years.

How does someone enter into a Green Deal agreement?

They need to appoint a Green Deal recognised Assessor who will visit their home and carry out a survey of their current energy usage and advise on what home improvements they should consider to save energy. An EPC is issued at this point.

What is an EPC?

Energy Performance Certificate, it’s purpose is to record how energy efficient a property is. The certificate will provide a rating of the energy efficiency and C02 emissions of a building from A to G, where A is very efficient and G is very inefficient.

What is the next stage after the assessment?

The householder needs to get funding through a Green Deal Provider who will offer a Green Deal Plan detailing financial terms, warranties and timescales that the plan can be taken out over.

* EPC certificate fee charges pre and post installation apply

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Guide To The Green Deal


Once the funding is in place what then?

Once an acceptable quotation has been obtained and an agreement signed an accredited Green Deal installer will carry out the work. The cost of the improvements will be recovered by instalments applied by houseowner’s energy supplier to their energy bills.

What is the “Golden Rule”?

The “Golden Rule” underpins what a consumer Green Deal finance repayments will be. They should not have to pay back any more than the savings they will make on energy bills as a result of the home improvements they have installed.

So a householder shouldn’t have to pay anymore than they were already paying for their energy?

Yes.

Who can enter the Green Deal agreement?

Homeowner, tenants and businesses.

Can we offer the Green Deal to our customers?

No, we are not accredited assessors so cannot offer a Green Deal to customers.

Could this not damage our business and lose us sales?

Customers need to consider the potential downside of taking out a Green Deal especially if they want to sell their house in the future. The cost of installing double glazing on it’s own would not be fully funded under a Green Deal. Even over a 25 year period a customer would need to pay part of the cost upfront either in cash or in additional finance funding.

The following page gives you some of the points against the Green Deal that you could use with customers to reinforce the benefits of buying from us.

Guide To The Green Deal

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Green Deal vs Lifestyle Account Double glazing Installed cost Funding under Green Deal Interest charge (7.9%) Additional funding required not covered under Green Deal Interest charge for additional funding not covered under Green Deal Total cost

Green Deal Loan

Lifestyle Account

(Over 25 years)

(Over 10 years)

£4,000 £1,970 £2,530 £2,030 £1,233

£4,000 NA £2,466 NA NA

£4,500 £3,263

£7,763

£6,466

(Source: moneysavingexpert.com)

How was the Green Deal calculated? Estimated annual savings after installation Monthly payback through energy bills Maximum number of years for payback 25 Funding £1,970 + interest charge of £2,530 =

£180 £180 divided by 12 = £15 £15 x 12 months x 25 years = £4,500 £4,500

*Lifestyle Account

(Source: moneysavingexpert.com)

What’s great about our offering? • • • • • • • • •

Recognised brand Free no obligation quote No upfront charges apply Dealing with one company Attractive finance packages TLS and CLC incentives - potential saving of £3,344* RRSA – peace of mind Add value to your home – no issues when selling Transfer guarantee to new owners

What’s not so great about the Green Deal? • • • • • • • • • • • • • • •

Fees of £75 to £150 charged upfront for EPC Loan charges anything from 7-11% £63 arrangement fee applies Annual charges of £20 apply Lengthy and complicated process to sign up Savings are estimate as no two home use same consumption Low users of energy could end up paying more Householder is fixed into a deal for up to 25 years Provider could increase amount you pay in charges annually House sellers need to declare Green Deal is attached to house when selling otherwise face potential compensation claim Buyers potentially view house negatively as debt attached Buyer needs to get further assessment - charges apply Buyer could demand seller has to pay off debt + interest charges before selling Initial speculation is that providers could apply full interest charges if debt is repaid early There is no guarantee the homeowner will save money

IT’S NOT AS SIMPLE AS IT SEEMS

(Source: moneysavingexpert.com) *£1,344 estimated annual savings using TLS card *£2,000 CLC holiday saving

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Guide To The Green Deal


Notes

Guide To The Green Deal

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Green Deal Brochure