–This Scheme has now been CLOSED by Government —
Green Deal for Heat Recovery Systems
It’s one thing to install technologies that reduce your bills and makes your energy consumption more efficient, it’s another getting the funds together to pay for it. The Green Deal is an initiative that allows you to make energy saving improvements to your home or business without the upfront costs.
Currently the Green Deal is only available for heat recovery and ventilation systems in a non-domestic situation – the effectiveness of a HRVS is generally determined by how airtight a building is and, as yet, there is no key measurement available on the scheme (though this may well change in the future). The Green Deal may, however, be available for other heat recovery technologies such as heat pumps and flue economisers.
What was the Green Deal?
The Green Deal replaced the government’s Carbon Emissions Reduction Target (CERT) scheme in 2012 and was set up to provide support for those who want to make energy saving changes to their homes or work place. Improvements can mean anything from insulating your office or home and putting in double glazing to installing renewable or energy efficient micro generating technologies such as solar panels, heat pumps and heat recoveryand ventilation systems.
The Green Deal allows you to take out a loan on improvements such as insulation, a new boiler or a micro-generation technology that can then be repaid through the savings on your energy bills. It differs from past schemes, where the cost of installation was covered by a general fund, and involves the individual taking out a loan and paying back a set amount via their electricity bill.
Because it is linked to your expected energy savings, you should not have to pay back a monthly amount that is more than the amount you are saving on your fuel bills.
There is, however, a caveat to this golden rule: It does not guarantee that you will be paying the amount you save – the figures are based on an estimate and there may be circumstance where you pay more than that.
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How did I Get a Green Deal Loan?
If you want to take out a Green Deal Loan then you will first need to have an assessment by a registered Green Deal provider. An adviser will come round to your property to carry out a complete examination and make a valued assessment of what energy efficiencies should be undertaken for your home or business. This is not a free service and you will normally have to pay for the assessment to be undertaken.
A Green Deal assessor can work as an individual if they certified through the Green Deal Certification Body and hold the Green Deal Quality Mark or they can be working for a larger organisation such as British Gas.
Once your property has been assessed, you will provide a report that you can then use to apply for your Green Deal Loan. This will include:
- The Energy Performance Certificate or EPC that reflects the efficiency of your property, rated from A to G.
- The Occupancy Assessment which details how you use energy within the property.
- Improvement suggestions that are suited to your property such as installing double glazing, putting in cavity wall insulation or installing a micro-generation technology.
The role of the Green Deal advisor is to suggest improvements that will meet the Golden Rule – that is the cost of the installation will be offset by the potential savings and will allow you to pay off the loan.
What were Green Deal Loans?
A Green Deal Loan for something like cavity wall insulation or an energy saving device such as a heat recovery system, is different from a normal loan that you would get from your bank or building society.
- The repayments for your loan are added to your electricity bill and, theoretically, the amount you pay should not exceed the amount you are saving on your bill through introducing the new energy efficient measures.
- Because this is based on an estimate it is not a guarantee that you may end up paying more than your savings, particularly if fuel bills rise.
- The lender will become your Green Deal Provider – that means they will set your interest rate and how much you can borrow (based on the initial assessment).
- The loan is not attached to you personally but to the property – so if you decide to move and sell up, the agreement is passed onto the new occupier.
- The loan is NOT provided by the government but by an independent lender.
Find out more about the Green Deal for all your home energy improvements.
Alternatives to the Green Deal
Whilst the Green Deal has a number of advantages for small businesses and domestic properties that would like to improve their energy efficiencies on a limited budget, there are a number of other options available if you are looking to install something like a flue economiser or heat recovery system.
Use existing savings: If you are lucky enough to have savings put by then you might like to consider using them to cover all or part of the cost of your energy improvements.
Taking out a loan: Taking out a secured or unsecured loan with a bank or building society is also an option. The loan will be attached to you and not your property and you may well have to pay it off sooner with a higher initial cost.
Increasing your mortgage: Adding to the long term loan of your mortgage is often more attractive for home owners as it gives the chance to spread the cost over a lengthier period.
Finding an Installer
Your Green Deal Assessor may well also work for an installation company and their advice will obviously be to go for their own product. The assessor needs to make it clear when they are switching from an advisory role to a sales role. You are not tied to their products once the assessment has been done and you are free to contact any other installer to find a better deal.
Find out which installers are in your area here.
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