Green Deal receives final Parliamentary approvals

Legislation for the Green Deal, the Coalition’s flagship environmental policy, has received final Parliamentary approvals. The ambitious environmental scheme hopes to dramatically reduce the UK’s total greenhouse emissions by tackling the nation’s inefficient housing stock which currently accounts for 43 percent of total UK emissions.

The Green Deal programme will allow bill payers to undertake energy efficiency improvements at no extra cost. To fund the range of measures supported by the Green Deal loans will be taken out and repaid under the ‘Golden Rule’; the expected financial savings must be equal to or greater than the costs attached to the energy bill.

The Guardian has revealed that Government is expecting loans taken out under the scheme to be charged at an interest rate of 7.5 percent. Responding to the news, Caroline Flint, Labour’s Shadow Energy and Climate Change Secretary, has called on Government to work harder to make the Green Deal fairer for consumers. Flint contests that repayment charges could end up more than doubling the cost of original energy efficiency measures. Labour calculates that, with an interest rate of 7.5 percent, a £10,000 Green Deal loan repaid over 25 years would see the consumer having to pay back £22,000 - more than double what they initially borrowed.

Flint added: "If it’s done properly, a pay-as-you-save energy efficiency scheme could cut carbon emissions, create jobs and lower bills for families. But the Green Deal must be a good deal for consumers. The public want a simple and affordable scheme so they can improve their home and cut their energy bills.

“It would be completely unfair if the public are forced to pay hefty penalties for doing the right thing and trying to repay their loans as soon as they can. The Government must come clean about what interest rates will be charged on the Green Deal so hard-pressed bill payers know it will save them money. To make the Green Deal work, ministers should use the Green Investment Bank to provide Green Deal finance at an affordable rate for families and businesses."

The scheme will allow consumers to borrow up to £10,000 to finance energy efficiency improvements to a property. Speaking to the Guardian, Greg Barker, the Minister for Energy and Climate Change, explained how he hoped £300 million worth of funding designated to support the scheme from the newly-established Green Investment Bank would allow lower interest rates than the expected 6-8 percent.

A DECC spokesperson also defended the interest rate adding: "DECC’s understanding from commercial organisations, such as the Green Deal Finance Company (TGDFC), is that the cost of finance will be around 6-8 percent, which for unsecured lending is a highly competitive rate, far lower than other forms of commercial finance. This compares very well for those on the lowest incomes that often have poor credit ratings and can often only access loans at high, punitive rates. The Green Deal will not be based on an individual's credit rating as it is linked to the property not the occupants."

The Green Deal is expected to launch in October this year. Currently, DECC is touring the nation with a Green Deal Supply Chain Roadshow to help those interested in getting involved with the scheme find out more about the opportunities available.

Source - Solar Power Portal

SMEs will now gain fair access to the Green Deal

Parity Projects is now in the final stages of launching a project designed to open up Government’s upcoming Green Deal to organisations of all sizes. The Green Deal Conduit will build a network of small and medium sized organisations involved in the assessment and refurbishment buildings throughout the UK. To date SMEs have voiced concerns that the scheme will only benefit larger companies.

The initiative, which is expected to be owned by its members, is backed by a range of professional institutions and trade associations which combined represent almost 100,000 SME and micro businesses in the UK. These organisations will ensure their members have fair access to the Green Deal scheme without ending up at the tail end of the supply chain.

Those involved include the Federation of Master Builders (FMB), National Federation of Builders (NFB), Royal Institute of British Architects (RIBA), Royal Institute of Chartered Surveyors (RICS), Building & Engineering Services Association (B&ES), The Renewable Energy Sector, The Electrical Contractors' Association (ECA), Institute for Sustainability (IfS), Federation of Small Businesses (FSB) and the British Institute for Interior Design (BIID).

Russell Smith, Managing Director of Parity Projects said, “A strong presence for smaller companies in the energy-focussed refurbishment market is desirable for two key reasons; firstly, homeowners will desire more than just a choice of high street brands. There are excellent, locally-focussed advisers and contractors that will be more preferred and trusted by some of the market.

“Secondly, smaller companies need to protect their existing refurbishment market which may be eaten into if some of their usual work can be funded by others. If there is no deliberate effort by smaller companies to access the Green Deal, they and homeowners will both lose out.”

Members of the Conduit will work independently but within a framework which allows members to work with each other and for a lead organisation. All providers involved will need to meet all Green Deal requirements.

“There are many critics of the Green Deal, and most of them expect the Government to be dumping work in the industry’s lap. The construction industry has always had a tendency to wait for work to come to it. In this case we have a new mechanism to drive change and the opportunity is really limited by our imaginations. The Green Deal Conduit has already captured the imaginations of many businesses around the country,” added Smith.

The Conduit has already seen interest from approximately 200 small construction practitioners across the UK however the group is now looking to attract others who want access to the Green Deal including contractors, energy assessors, architects, surveyors, builders’ merchants and community groups.

“We have spoken with DECC and they are excited by the prospects of the model but it will need genuine Government support to take it to the next level. As it ticks so many boxes such as building a local economy, creating a market for apprentices and providing a mechanism for community groups to drive change in their areas whilst minimising carbon dioxide emissions we hope Government do find a way to help it grow.

“The big question now is which Green Deal Providers are really serious about wanting to use smaller practitioners and if they are they will want to get in touch and start dialogue.”

Paul Reeve, Head of Business Policy and Practice and the Electrical Contractors’ Association, said: “Small businesses will not only provide more choice, but also the service flexibility and innovation that will encourage a much broader range of customers to engage with the Green Deal. We fully support the Green Deal Conduit.”

Meanwhile Anna Scott-Marshall, Head of External Affairs at RIBA said: “The Green Deal should be accessible to all sizes of business. If small businesses struggle to access the Green Deal market this may impact on those who currently undertake building renovation work. We must create a competitive market to respond to the challenge of renovating our national housing stock to be more energy efficient. The Green Deal Conduit is a way of addressing this concern.”

“The Green Deal not only represents a huge opportunity to increase the efficiency of our homes and buildings but also to stimulate the construction sector during these difficult economic times. Yet with the vast majority of construction firms being SMEs, there is an urgent need to ensure smaller builders can access the Green Deal and benefit from the new economic opportunities it has to offer. The FSB believes Green Deal Conduit offers the means for small firms to access the Green Deal and let customers choose their local builder for their Green Deal work,” David Caro, Chair of the Federation of Small Businesses Environment and Energy Committee, concluded.

Source - Solar Power Portal

Gemserv appointed as Green Deal oversight body

The Department of Energy and Climate Change has announced that multi service provider, Gemserv, will run the new Green Deal oversight body. The company will be responsible for the registration of assessors, installers and providers as well monitoring compliance with the Code of Practice.  

The department said that: “Gemserv, with their partners REAL, has been chosen to provide these services on behalf of DECC for the next three years following an open competition. Both Germserv and REAL currently operate the MCS scheme for DECC so are well acquainted with the challenges and requirements involved in operating a scheme of this nature.”

The service is set to start in August ahead of the planned introduction of the Green Deal later this year.

Importantly, DECC has announced that there will no longer be any fees for assessors, installers and providers who wish to get involved in the scheme. The department will foot the bill for the registration and oversight service for the first two years of the energy efficiency scheme, with the intention of moving to a fee-based approach once the Green Deal has become established.

Reacting to the news, Energy and Climate Change Minister, Greg Barker, said: “We need to make sure all the Green Deal assessors, installers and providers get our stamp of approval to ensure the highest level of consumer protection for householders and businesses under this scheme. I am delighted that Gemserv has risen to the challenge and is going to take on this very important role.

“No registration fees for the first two years will remove burdensome admin costs at a time when many can least afford them, helping encourage organisations to get onboard and offering more freedom of choice for consumers.”

David Thorne CEO of Gemserv said: “We are delighted to have been appointed as the Green Deal Oversight and Registration Body and are looking forward to playing a central role in implementing and developing this ground breaking programme.

“Gemserv will be able to draw on our strong experience of delivering the MCS scheme, maximising the synergies, and we hope to begin discussions shortly with key industry participants to ensure we are prepared for the Green Deal’s launch. We are working closely with our delivery partner REAL utilising their extensive consumer protection experience.”

In addition, to the appointment of an oversight body, the department has announced that Ombudsman Services Ltd will become the provider of the Green Deal Ombudsman and Investigation Service. This will remain a free service that is designed to help alleviate disagreements between customers and Green Deal providers.  

The department said: “The Ombudsman will investigate complaints and determine redress for consumers. Depending on the type of complaint, following an investigation, the Ombudsman will refer cases to the Secretary of State for determining redress or imposing sanctions.”

Chief Ombudsman Lewis Shand Smith said: “The Green Deal is a new concept to householders. Consumers taking up the Green Deal can be confident that if something goes wrong they will have easy access to independent and effective redress.

“We already provide the ombudsman service for the energy (supply and network) industry and its customers, to it makes sense for complaints about Green Deal providers to come to us. We’re looking forward to working with DECC on the details of the scheme.”

This new service will be up and running by October 2012 and is an important part of the Government’s approach to assuring consumer protection under the Green Deal.

Source: Solar Power Portal

Prepare for launch: DECC seeks to seal the Green Deal

Following the consideration of more than 600 responses to the consultation on the Green Deal and ECO, Government has today set out secondary Green Deal legislation. The changes to the original proposals include measures to strengthen consumer protection, reduce industry burdens, and to implement the Energy Company Obligation (ECO).

The Department of Energy and Climate Change (DECC) plans to cement the Green Deal and ECO rules by October this year, including, in legislation to be laid later this week, ensuring support worth around £1.3 billion a year to deliver energy efficiency and heating measures across Great Britain.

Government’s aim is to increase the energy efficiency of residential and business buildings across the UK.

Announcing the news the Energy Secretary and Climate Change Secretary, Edward Davey, said: “Today I have published the Government’s detailed plans along with legislation that will allow the industry to bring the Green Deal into existence. The Green Deal will play a huge role in improving the energy efficiency of our homes and businesses, with ECO making sure that the most vulnerable homes benefit too.

“We have listened very carefully to what industry, consumer groups, and other organisations have told us. Broad support for a managed, tested and careful introduction of the Green Deal fits exactly with our objective to provide an excellent customer experience from day one and a market where a range of new players can readily participate.

“I am determined to make sure that, in addition to creating huge opportunities for Green Deal providers and businesses along with thousands of new jobs, this new market in energy efficiency will deliver the very best deal for consumers.”

What’s new?

One of the largest concerns surrounding the rollout of the Green Deal was the lack of consumer protection and the burden the policy would place on businesses. DECC’s revised version of the policy will place restrictions on ‘cold calling’ and implement new rules requiring Green Deal Assessors to declare any commission they might be receiving for carrying out an assessment and any ties to Green Deal Providers.

There will also be a change to the original warranties proposal. The latest version eases the requirements on businesses to hold warranties for the length of a Green Deal Plan while maintaining robust minimum standards of protection for consumers.

Changes have also been made to the ECO to include allow more hard-to-treat cavity walls to qualify for support, and to provide specific support for low income and rural areas. An estimated technical potential of around 2.8 million hard-to-treat cavity wall properties will now be eligible under the ECO.

The Green Deal framework will consist of assessors, installers and Green Deal Providers, all of which should be ready to start work in the autumn of this year. From August accredited certification bodies will be able to submit applications to register with the Green Deal Registration and Oversight Body, and will then be able to register assessors and installers as ‘Green Deal Approved’. Potential Green Deal Providers will be also able to apply for approval.

Today’s announcement also includes a final impact assessment and associated research, and confirms the appointment of Ofgem to be the ECO Administrator. Government will shortly announce the contract awards for the Green Deal Registration and Oversight Body and the Green Deal Ombudsman and Investigation Service function.

In response to the news Garry Worthington, Head of Green Deal at Climate Energy, said: “This response has been greatly anticipated, and we expect it to answer some of the questions surrounding the future of energy efficiency in the UK and will help us to further progress with our plans to become a Green Deal provider, as well as helping local authorities and regional organisations move ahead in terms of designing and implementing regional and local schemes.

“The improvements to the consumer protection elements of Green Deal are particularly welcomed.  These new safeguards, along with the plans to calculate savings on a daily rather than annual basis, will go a long way in encouraging homeowner and tenants to take advantage of the finance available for energy efficiency improvements. 

“However, we are disappointed that the Government remains undecided about its £200m fund to kick-start the scheme.  We think the current plans to use this purely as a cash-back incentive over the next two years are mis-guided and that could be used much more creatively to support regional schemes, local innovations, jobs, communities and delivery to give take-up an initial boost.  We would also urge DECC to reconsider its support around promoting Green Deal and creating awareness of the scheme.”

Rhian Kelly, CBI Director for Business Environment policy, said: “Having more details on how the Green Deal will operate on a practical level is an important step for a scheme that has the very real potential to cut costs for consumers and businesses in the long run, and help generate business investment and jobs.

“However, there is still plenty of work to do. With the launch of the Green Deal expected towards the end of the year, Government needs to move quickly to put everything in place. It must ensure that businesses who want to get involved are in the best position to do so and put the right policies in place to stimulate consumer demand.”

Source - Solar Power Portal