UK’s Green Deal moves a step closer as Energy Act becomes law

The UK Energy Act was passed today paving the way for the legal framework for the Green Deal, which has the potential to transform the energy efficiency of Britain’s homes and businesses.

The Housing Energy Fact File, a new Department for Energy and Climate Change (DECC) publication, states that more than half of Britain’s homes do not have sufficient insulation, and around 50% more energy is used to heat and power homes than is used to power UK industry. “It is vital, therefore, that action is taken to address home energy efficiency,” claim the DECC.

“A huge hurdle has been passed in bringing the Green Deal closer to making homes warmer and cheaper to run. The coalition is doing all it can to bear down on energy prices, but insulation will provide the long term help to manage bills,” said Energy and Climate Change Secretary, Chris Huhne.
The key element of the newly legislated Energy Act will see the removal of the upfront cost of energy efficiency measures, such as loft, cavity and external wall insulation, draught proofing and energy efficiency glazing and boilers, with energy saving work being repaid over time through a charge on the home’s energy bill. However, the repayments must obey a “golden rule”, whereby the charge is no more than the expected savings, resulting in householders saving from day one.

The process of a so-called Green Deal by a householder will consequently be completed in three stages. Firstly the homeowner will request an impartial property assessment to determine what work needs to be done, which can then be taken to a variety of Green Deal Providers to gain a variety of quotes. With the best deal found, the consumer will then have the necessary measures installed and paid for by the Green Deal Provider. Lastly the householder will begin to repay their chosen Green Deal Provider through their monthly utility bill.

“When it’s introduced, the Green Deal will be as easy as ABC by making work affordable, providing bespoke independent advice and choice in the market from well-known and trusted high street names,” added Huhne.

The news of this latest milestone follows further good news for the consumer, with the announcement of the first financial consortium, which will ensure low cost interest rates on future Green Deals. Additionally, it is hoped that the Green Deal Finance Company will offer healthy competition among Green Deal Providers and likewise small businesses offering related services.

“As well as helping people save money through home energy improvement, the Green Deal will be a massive business opportunity,” commented Climate Change Minister, Greg Barker. “It’s expected to attract capital investment of up to £15 billion in the residential sector alone by the end of this decade and at its peak, the Green Deal could support around 250,000 jobs.”

Over the next year, work will continue to get Green Deals ready for market, with the formal consultation on secondary legislation expected at the end of this month before it is put to Parliament in the spring of 2012. It will not be until autumn 2012 that we see the first Green Deals materialise.
 

 

Image 01: Darren Antrobus | Wikimedia Commons

Image 02: Bryan Pinzgauer | Flickr