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Government Green Deal Stalls at Red Light

View profile for Paul Hajek
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green deal hits red lightThe Green Deal is a government initiative with two fold objectives: reducing household carbon emissions thus saving energy and resulting in lower household energy bills.

The Coalition Government had high hopes for the Green Deal that Energy Minister at the time Chris Huhne said it would be a “revolution...the most ambitious energy-saving plan ever put forward”

How Green Deal Works

The idea is that you the Homeowner take out a loan to pay for energy-saving measures such as a new boiler, loft insulation, solar panels or double glazing. But those of you even more environmentally responsible could also apply for ground source pumps, micro wind generators and even a biomass boiler.

The annual running costs of such energy efficient measures are designed to reduce your energy bills; there will be no net loss to you. The savings made on your energy bills are used to pay off the loan over time - up to 25 years- through your electricity bills.

Green Deal - 4 Step Process

You've probably guessed that a new fangled scheme creates a whole raft of fancy-dan business titles.

Step 1: Step forward and take a bow -the eponymous Green Deal Assessor. The GDA (that acronym can only be a matter of time) pops around to discuss with you the best way to cut your energy bills

Step 2: The Green Deal Assessor compiles a report to ensure you are “suitable” (no conflict of interests there then!) candidate and then he or she provides you with quotations for the works.

Step 3: Contracts are signed and the installation begins

Step 4: The energy company or supplier is then required to include your Green Deal repayments on your utility bill. Your loan is repaid from your savings on energy bills - at no extra cost to you.

Reality Bites

So, hands up, how many lucky households have availed themselves of the Governments Green Deal?

According to the Sunday Times recently, that’ll be just the 2 then! - out of 30,000 applications. Just a bit south of the 10,000 target this year.

How Will The Green Deal Affect Your House Sale or Purchase?

We Conveyancing Solicitors will then be responsible for untangling the Green Deal payment and loans when your property is sold where the loan has been previously paid off.

You may not know that the Green Deal is not a personal loan but a loan attached to the property. Not so much a headache at the moment, but over time if the Green Deal becomes a success, your Conveyancing Solicitor will have to check that the loan has either been paid off or an allowance is made to compensate.

Your Conveyancing Solicitor will also have to check all necessary consents were obtained, your Surveyor may need to advise that “no corners” were cut when the works were carried out, especially – shock horror- where the Green Deal Assessor and associated installation companies may have gone out of business in the meantime.

If you are taking out a mortgage on your new property then your Conveyancing Solicitor will need to inform your Lender. Lenders may may their own rules and regulations around the Green Deal.

A Heads Up  

Conveyancing fees are likely to increase to incorporate all the extra bureaucracy surrounding the Green Deal.

But, hey ho, it would be churlish to deny the good intentions of the Green Deal Scheme, so let’s wait and see.

We will provide an update to this post when the Green Deal lights change from red to amber.

Paul Hajek

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