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The Green Deal

Submitted by on 26 Jul 2011 – 11:33

Gregory Barker MP Greg Barker MP, Minister for Energy and Climate Change

For the new coalition Government, tackling climate change, securing our future energy supplies and making a permanent transition to a low carbon, high growth economy is an urgent and vital task.

Energy efficiency lies at the very heart of our strategy. It means being smarter about the energy we use – making the most of a precious resource and eliminating waste.

But it’s also a policy that’s long been ignored – with homes and businesses across Britain wasting energy and money.

The Green Deal

The Government’s Green Deal is about providing a long term solution to this intractable problem.

The Energy Bill will set in place the framework for the Green Deal.

It’s the biggest shake-up in the history of energy efficiency. It will be more ambitious than anything that’s ever been tried before. It will reduce energy wastage and save people and business money. It will create jobs, reduce CO2 emissions and help secure energy supplies for future generations.

The idea is to get high street companies people already know to provide the finance for trusted and accredited advice, and installation of energy efficiency measures in homes and businesses.

Customers benefit from homes and business premises that are cheaper to run from day one.

Through legislation, we want the finance to be tied to the energy meter. People will pay back the costs over time through their energy bills, with the payments being less than the savings on bills.

The Green Deal will be available whether people own or rent and, because it’s not like personal debt, personal credit ratings are not a factor.

The potential

The Green Deal will be a bigger national drive than putting on the London Olympics. Just as the Games are closing in 2012, we will be kick-starting an energy efficiency overhaul of homes and businesses across the country.

The Green Deal has the potential to support up to 250,000 jobs by 2030 as part of a new energy efficient industrial revolution. Insulation installers and others in the retrofit supply chain all stand to benefit from this long overdue energy efficiency makeover. So it’s important that the insulation and construction industry can prepare their workforces with the appropriately skilled people to provide the quality installations and services the Green Deal will demand.

And with millions of British homes and businesses requiring insulation, the Green Deal also offers a unique opportunity to help drive economic growth, unlocking billions of private investment every year.

So how does it work?

With homes and businesses accounting for a quarter of all CO2 emissions, and energy bills in UK households standing at an average of £1,300 per year, improving energy efficiency and reducing bills in the process is an obvious solution.

The Green Deal will make it as easy and as financially attractive as possible to do work like lagging lofts, filling in wall cavities and taking further steps to reduce energy use in the home.

And it will work in the same way for businesses, irrespective of size, by offering the opportunity to improve things like heating and lighting without needing to meet these costs upfront.

But we need legislation to make this happen. The Energy Bill will legislate so that payment of the costs can be made through a charge on the energy bill. Households and businesses would only pay while occupying the property and enjoying the benefits.

A key element of the Bill will be to ensure customers are afforded the right level of protection under the Green Deal. Trust is important when it comes to having work done in homes, so consumer protection will be built in from the word go. There’ll be proper accreditation, a quality mark and insurance-backed warranties to prevent against rogue traders.

The Green Deal will be a terrific win-win opportunity for landlords by removing the upfront cost of work to upgrade the property making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.

But proposals in the Energy Bill will also provide a voice for tenants living in poorly insulated, draughty homes or operating from energy inefficient businesses.

We will get tough so that by 2018 the poorest performing rented housing and business stock is brought up to a decent energy efficiency standard.

Help for the most vulnerable

In parallel, we’ll also ensure that the major energy companies remain obliged to invest in energy improvements for homes across the country. This means that, for the poorest and most vulnerable, or those living in properties that are particularly hard to treat, there’ll be extra support to help people benefit from the measures that the Green Deal has to offer.

Importantly, better insulation means less energy is needed to heat the building, meaning lower costs for households and businesses, helping to cushion everyone against rising energy prices.

There will be plenty of opportunities and different ways for councils to play a role too. Councils could opt for a very hands on approach by becoming a Green Deal provider or partnering up with another provider. They might go door to door to help promote better energy efficiency and increase take-up of local offers. Regardless of how they choose to get involved we want to tap into the knowledge and influence they have in the local community so we can prioritise help for the poorest.

The Green Deal will create huge benefits for local authorities. For example, if a council was to become a Green Deal provider it could benefit financially. There are also synergies between the wider aims of Local Authorities and the Green Deal, including raising standards of housing stocks and the well-being of local residents. We want to see more collaborative working, not just between Green Deal providers and local authorities but neighbouring councils working together, charities, voluntary organisations and community groups getting involved to come up with innovative solutions to rolling out energy efficiency on a street by street basis.

What’s next?

Just as the organisers of the Olympic Games are furiously working to ensure the venues and infrastructure are in place for 2012, we are doing exactly the same with the Green Deal.

Due to come into force in Autumn 2012 – we will set in train a radical change in Britain’s energy efficiency, bringing the green economy into every home and business.