The Green Deal in 2018

The original Green Deal scheme was launched in 2013 but ended in July 2015 when the Government withdrew its financial support for the Green Deal Finance Company (GDFC), a not-for-profit organisation set up to manage the scheme.

The Government sold the company to private investors, Greenstone Finance and Aurium Capital Markets, who since May 2017 have been running the scheme in much the same way as before, offering Green Deal Loans through a select number of approved Green Deal Providers.

Quick links:

• What is the Green Deal?
• How does the Green Deal work?
• Who is involved in the Green Deal?
• Do the regulations apply as before?
• What happens if I move house?
• I want to complain about the Green Deal. Who do I contact?
• What other financial help can I get?
• I still have a Green Deal Loan from the old scheme. Do I need to do anything?

What is the Green Deal?

The Green Deal is a scheme that provides ‘pay as you save’ loans for energy-saving home improvements such as:

• insulation (e.g. solid wall, cavity wall, loft)
• heating (e.g. storage heaters, central heating) and boilers
• double glazing
• draught proofing
• renewable energy technologies (e.g. solar panels)

Its overall aim is to help make energy saving measures more affordable and accessible.

How does the Green Deal work?

The scheme allows you to balance the cost of the improvements against the savings that are achieved. Green Deal Loans work differently to ordinary loans:

• You can only borrow what the improvements are deemed to save you on your energy bills. If the improvements cost more to implement than what they would save over their estimated lifespan (e.g. 25 years), you would have to pay the remaining balance yourself. This is known as the “golden rule”.
• You make repayments as part of your electricity bills. If you pay for your electricity via a meter, the meter will deduct a small charge each day.
• The loan is linked to your property, not you individually. So if you sell your house, the new owner will take on the repayments.

There’s no set interest rate, but the average rate is around 9.3% APR. Your rate stays the same for the full repayment period, which is decided by how long the improvement is expected to last—so typically 12 years for boilers and 25 years for insulation, for example.

When you apply to the scheme, your Green Deal Provider will tell you how much interest you’ll pay.

Who is involved in the Green Deal?

Only Green Deal-approved organisations can help you get a Green Deal Loan and install the recommended energy-saving home improvements.

To become a Green Deal Provider, an organisation must:

• go through a detailed assessment
• be accredited by the Green Deal Oversight and Registration Body (the Green Deal ORB)
• have authorisation from the Financial Conduct Authority to act as a moneylender.

Some organisations gain Green Deal accreditation in several areas so they can be involved at every stage of the process.

The Green Deal process – who’s who

Green Deal Assessors

• Carry out a detailed survey of your home
• Put together a Green Deal Advice Report highlighting which energy-saving improvements they deem suitable for your property

Green Deal Providers

• Take you through the loan application process—which includes creating your Green Deal Plan (essentially your credit agreement)—and submit the application to GDFC
• Arrange for the improvements to be made, once GDFC have provided finance (see below)
• Manage Green Deal Plans as they go on (including handling complaints and providing advice)

GDFC

• Approve your loan and provide the finance for the work to go ahead

Green Deal Installers

• Do the actual work, such as installing insulation or fitting a new boiler

We’re not offering Green Deal Loans at present, but will keep this decision under review as the relaunched scheme develops.

Do the regulations apply as before?

Yes, the new Green Deal is covered by the same legal regulations as the original scheme.

And as before, all Green Deal Providers, Assessors and Installers must keep to the official guidelines set out in the Green Deal Code of Practice.

What happens if I move house?

Your Green Deal Plan is linked to your property, not you. So if you move out, the new owner becomes responsible for the repayments. However, you must make them aware of this.

If you own the house and are selling it, you should let your solicitor or conveyancer know that you have a Green Deal Plan. They will tell the new owner.

If you’re a tenant and are simply moving out, your landlord should get the new tenant to acknowledge that they’re aware of the financial responsibilities they’re taking on.

I want to complain about the Green Deal. Who do I contact?

In most cases, you should contact your Green Deal Provider first. They have a duty to handle your complaint in the proper way and sort out any problems, whether it’s to do with your loan, the installation or product, or their general service.

If they don’t resolve your complaint within eight weeks, or you aren’t happy with what they’ve done, you should contact the Green Deal Ombudsman.

What other financial help can I get?

The other main route for funding for energy efficiency improvements is via grants. Grants are currently available through the ECO Scheme for certain qualifying householders.

It’s likely that you’ll need to top up the grant offered through the ECO Scheme to cover the full cost of energy-saving measures. A Green Deal Loan could be one way of doing this.

Other possible payment options to support energy-saving installations include:

• an unsecured loan
• an increase in your mortgage
• a 0% interest credit card
• a local finance scheme through your local authority or credit union (if available).

I still have a Green Deal Loan from the old scheme. Do I need to do anything?

No, your loan agreement remains unaffected and you and the Green Deal Provider have the same legal obligations as before.

You may want to pay off your loan early. However, if you took out the loan before May 2014, you could be charged a fee for early repayment.

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