The Green Deal is the coalition government’s initiative to support energy-efficiency measures in homes throughout the country. The administration has described it as a ‘fundamental game changer’ that will ‘break with the stop-start, short-term programmes that we have seen before’.
More than 26 million households in the UK could benefit from a ‘carbon makeover’. At least 14 million will need one over the next decade just to meet UK emissions targets, so to say there’s a lot riding on it is an understatement.
But business and consumer groups are not convinced, saying that more incentives will be needed to help meet tough emissions targets and constrained consumer and business budgets.
The bill is designed to overcome the barriers to the adoption of energy-saving equipment such as lamps and lighting controls in homes and workplaces.
A bill to cut bills
The Lighting Industry Federation welcomed the second reading of the Energy Bill, which enables the Green Deal. The scheme is designed to encourage energy-efficiency improvements that are paid for by savings on energy bills. Householders, private landlords and businesses do not have to pay the upfront costs.
The government hopes the Green Deal will stimulate investment in energy-saving measures for homes and non-domestic buildings, which currently have poor energy-efficiency ratings. The deal is intended to fund fixed improvements to the energy efficiency of domestic and non-domestic properties, and save money for the bill-payer.
The Green Deal will include a financial framework to enable energy-saving measures to be paid for in instalments through energy bills. The ‘golden rule’ of the bill is that the instalment payment for the energy- saving measures should not exceed the projected cost savings on an average bill for the duration of the Green Deal finance arrangement, which could be as long as 25 years.
Focus on the poorest
The government will also oblige energy companies to help the poorest households and types of domestic property that are difficult to improve.
Green Deal finance will create a legal mechanism that will make it possible to attach the obligation to pay for energy-efficiency measures to the energy bill for a property, not an individual. The obligation to pay will pass to the new occupier or bill-payer should the original applicant move away.
‘At present we know that most people who expect to move again in the next 20 years or more are put off making a large investment in energy efficiency because the costs are only affordable by factoring in savings generated after they expect to have moved,’ said a spokesman for the Department of Energy and Climate Change (Decc). ‘The Green Deal will mean they only pay whilst they remain at the property enjoying the benefits.’
This scheme will let householders, private landlords and businesses pay for energy efficiency measures such as a lighting refurbisment, new lamps or extra controls, without up-front finance. The Energy Bill will also create powers to allow any tenant who asks for reasonable energy efficiency improvements to receive them from 2015 onwards. It will also allow local authorities to insist that landlords improve the worst-performing homes.
Is lighting covered?
But it’s not clear what types of lighting will be covered by the deal.
‘If you turn a house upside down and shake it, anything that falls out won’t be covered by the Green Deal and anything that stays in will be,’ says Eddie Taylor of LIF. So it looks like compact fluorescent and LED lamps are out – but controls are in. This is great news for the commercial sector, but the lack of penetration of controls into the domestic sector is a problem.
‘The Green Deal could help change this culture – but no one’s holding their breath.’