What is this Green Deal then? Yet another government initiative?
The Green Deal is a government scheme intended to improve the energy efficiency of British properties. It allows private landlords to introduce energy-saving measures to their properties without any upfront cost to them. In the most part, the cost will be paid by the tenants through their utility bills.
So Landlords can insulate their properties for free?
In most situations, yes. The energy efficiency measures are paid for by a loan which is repaid over a period by a levy on the property’s utility bills. The cost of the improvements will be paid by whoever pays the utility bills, in most cases the tenants. Where utility bills are included in the rent, or during void periods, the landlord will be responsible for paying the levy.
What’s in it for the tenants?
The idea is that tenants will benefit from lower energy bills as a result of the insulation and other energy efficiency measures carried out by their landlord. Yes, there will be a levy on the utility bills, but if everything works out as planned, this will be largely offset by the reduction in the bill due to the energy savings. It is a big “if”, of course.
It may be free for landlords. But there’s still no reason for landlords to waste time over it is there?
Well, yes. Better energy efficiency is a good thing in itself. Not only are you helping to save the planet, but it could also reduce a landlord’s maintenance bills. But leaving that aside, the government has introduced a stick as well as a carrot:
First, from 2016 tenants will have the legal right to demand that a landlord carries out energy efficiency measures. If they refuse without good reason, the local authority can compel them to do so and will have the power to fine landlords up to £5,000.
Secondly, from 2018, it will be illegal for landlords to let out a property which does not meet a minimum energy efficiency level, expected to be EPC Band ‘E’. It would be a good idea for landlords to dig out those EPC certificates and check whether your property is rated ‘E’ or above.
There is one small exception to this: the principle behind the Green Deal is that there should be no upfront cost, so if a landlord has already carried out all the energy efficiency measures under the Green Deal package and his/her property still does not meet the minimum efficiency requirement, then the landlord will be “let off” i.e. will not be required to pay for any additional measures.
What kind of stuff does the Scheme cover?
It covers the usual things such as loft insulation and cavity wall insulation. But, depending on the property, it may be that other improvements will be eligible too. Solar panels, for example. Or an upgrade of an existing boiler to a more efficient condensing model. Or double glazing. Where the cost of the improvements are significant, they may only be part-covered by the loan, with the property owner having the option to fund the rest independently.
When does all this kick in?
From October 2012, although it is expected that the financial part of the package will not be up and running until “late January 2013″. Probably February or March, in other words.
I’m a landlord. How do I get my property insulated for free?
You will have to contact an approved assessor, details of which are expected to be announced shortly. If your property qualifies, an approved installer will carry out the work and the cost will be added as a loan attached to the property’s utility meter account.
UPDATE – the government is now offering cashback incentives for property owners taking up the Green Deal (see our post)