The Green Deal is a government backed scheme set-up to help people afford to make energy efficient home improvements.
In its simplest terms the Green Deal is a type of loan that is available to eligible households that will cover the cost of a very wide range of energy saving home improvements.
Unlike a normal loan, the repayments are made through savings in your energy bills.
The Green Deal is not a conventional personal loan as the charge is attached to the electricity meter in your house and paid back through your electricity bill. If you move out, the new occupant will pick up the charge while also benefiting from a more energy-efficient property.
The green deal is not going to make you money, and for the term of the loans repayments it is not going to save you much money either. However it will mean you are able to make environmentally supporting improvements to your home, which will make your home more comfortable and warm, plus you will be doing your bit to help the environment, without hitting your savings or regular outgoings.
As the green deal loan will be repaid through savings made in your energy bill, and it is paid through your energy provider, you will not be paying any more than you are currently paying to heat and power your home.
It is a complex system, however it does make the cost of making your home more green more affordable, as you will not need to save or borrow money to afford to install renewable energy technologies.
It can be used to finance Solar Thermal, Air Source Heat Pump, and Biomass installations, which due to the RHI mean that you can still generate some earnings from the installation of such systems, whilst not needing to invest all the up-front costs to install these systems.
The Green Deal can be used to finance lots of energy saving home improvements including:
- Cavity wall insulation
- Double-glazing
- Draught-proofing
- Solid wall insulation
- New gas condensing boiler
- Biomass Boiler
- Heating controls
- Loft insulation
- Solar thermal panels
- Underfloor heating
- Air source heat pumps
- Many more improvements …
The better insulated your home, the more efficient your renewable heating system will be, and in most cases a certain amount of these measures will need to be in place to qualify for the RHI.
The Green Deal is a good option to finance these improvements.
How do I Apply for the Green Deal
The Green Deal process has four stages:
1. Assessment
You will need to arrange for a Green Deal assessment to be carried out on your home by a Green Deal Advisor. They will:
Identify what energy efficiency or microgeneration improvements you could make to your home, and explain what the likely financial savings off your energy bills would be.
Identify which improvements are likely to be the most cost effective.
Produce a Green Deal advice report outlining your options.
There will be a charge of £120-£150 for the required assessment.
2. Arranging the Finance
If you decide you would like to arrange for any of the improvements recommended in the Green Deal Advisors report, you will need to then contact a Green Deal Provider to arrange and set-up a Green Deal Plan that will provide finance through the scheme. The Green Deal provider will then arrange for the installation of the agreed energy efficiency improvements through an authorised Installer (as only Green Deal Authorised Installers are permitted to carry out the work under the scheme).
The Green Deal Plan sets out the financial terms of the agreement and includes consumer protections, such as warranties, to cover the energy efficiency improvements and installation. Only an authorised Green Deal Provider can offer a Green Deal Plan.
3. Installation
The Green Deal Provider will arrange for a Green Deal installer to come and carry out the work you have agreed to.
4. Repayment
You pay back the cost of the improvements over time through your electricity bill. Your electricity supplier will pass your payments on to your Green Deal Provider. The amount you pay back will be no more than a typical household will save on heating bills, so you are likely to be better off overall from day one.
