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Law for Business

Knowhow - guidance - precedents

08 OCT 2012

Green Day, Green Deal, Green Light

ClarkesLegal

"Wake me up when September ends." This phrase from American rock band, Green Day's 2005 song aptly captures the apparent dormancy in the period running up to the go-live date of the government-backed energy efficiency programme, Green Deal. The Green Deal went live for households on the second of October in a rather understated manner. The Department of Energy and Climate Change published a statement on its website that the ‘regulatory green light signals to industry that the market can now get started'. This statement coupled with silence from the Energy Minister has left stakeholders, particularly assessors, feeling let down by government.

In a nutshell, the Green Deal enables UK consumers to borrow from funds to have energy efficient improvements made to their buildings. These ‘loans' are paid back by consumers in instalments as part of their energy bills. The major incentive for consumers is that financial savings from energy efficient improvements must be equal to, or greater than, the cost of repayment. This is known as the ‘Golden Rule'. Going live means that households are now able to apply to have their energy needs assessed in anticipation of the installation of energy efficient measures.

Delays by Green Deal providers in acquiring funds mean that while assessment can still go on uninterrupted, consumers will have to wait until 2013 to access funds for these improvements. The success of Green Deal depends on its attractiveness to consumers. As such, there have previously been plans to offer cash back and council tax rebates to participating consumers but there is still a lack of clarity as to how these will actually be offered to consumers. On the positive side, delays have enlarged the time within which private service providers can weigh the pros and cons of the Green Deal and assess opportunities for business within the programme.

Nyambura Karita

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