The Energy Act 2011 included a provision for the new Green Deal framework, which aims to retrofit the UK’s existing homes through approved energy efficient measures to save energy, carbon and costs.

The Green Deal will enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no upfront cost, and instead providing reassurances that the cost of the measures should be covered by savings on the electricity bill through a Green Deal Plan.

CERT and CESP, the preceding grant schemes that were in place, ended in December 2012 and was replaced by ECO. The Energy Company Obligation (ECO) will integrate with the Green Deal to offer grants for energy efficiency measures focused on those householders who cannot achieve significant energy savings without an additional support.  For example, this includes vulnerable and low-income households and those living in harder to treat properties, such as narrow cavities and solid walled properties. Suppliers have carbon and heating savings targets as published in "The Order", so it is estimated they will be contributing £1.3bn per year through ECO, to achieve these targets by March 2015

The Government has also set out some new rigorous codes of practice and certifications (i.e PAS2030) for companies to achieve if they are involved in delivering Green Deal. This is to ensure that consumers are protected, receive excellent customer service and work is at a consistently high standard.

Green Deal officially launched on the 28th January but the details around the finance elements of the scheme, are still to be finally agreed.

Why the need for a Green Deal and ECO?

The UK needs to become more energy efficient to reduce its greenhouse gas emissions, which risk dangerous climate change. The Climate Change Act 2008 legislated for a reduction in carbon emissions and set legally-binding carbon budgets across all sectors of the UK economy — including homes and communities, and workplaces.

Green Deal has also been created to support other provisions contained within the Energy Act. For example, from April 2016, private residential landlords will be unable to refuse a tenant's reasonable request for consent to energy efficiency improvements where a finance package, such as the Green Deal and/or ECO is available.

The Act also provide for powers to ensure that from April 2018, it will be unlawful to rent out a residential or business premise that does not reach a minimum energy efficiency standard (the intention is for this to be set at EPC rating 'E'). The Green Deal provides a finance mechanism for improvement to be made to even hard to treat properties.

For more information about Green Deal and ECO at Axis, please contact our Head of Green Deal and ECO on Joanne.Ebel@axiseurope.com