Government sets out legislation for Green Deal

Secretary of State for Energy and Climate Change, Edward Davey has announced the release of government responses to the Green Deal and Energy Company Obligation (ECO) consultations, ahead of the introduction of the Green Deal in October 2012.

In a series of publications released on Monday (11 June), including the consultation responses, the government sets out major amendments to the energy-efficient Green Deal and ECO policies, which will be brought into effect through legislation laid in parliament later this month.

 “I have published the Government’s detailed plans along with legislation that will allow the industry to bring the Green Deal into existence”, said Davey. “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.”

Inadequately insulated houses see many British homes ‘leaking’ heat, collectively accounting for 43 per cent of the UK’s total greenhouse gas emissions. The Green Deal programme will enable energy customers in England, Wales and Scotland to receive low cost loans to make energy-saving improvements to their houses. The repayments will be then attached to the energy bill, rather than the individual, and will pass to any new occupier of bill payer. It is expected that the instalment payments would not exceed the savings on an average bill.

The Energy Company Obligation (ECO) shall also be implemented alongside the Green Deal and will provide further financial help to those in financial difficulty and for properties that are harder to treat.

Over 600 people responded to the government’s November consultation on the Green Deal and ECO, and their queries were considered in the new policy released yesterday, as Davey, explained: “I would like to thank all those who submitted a formal response or participated through the various activities held during the consultation. Feedback from the consultation directed our focus towards four key policy areas: strengthening consumer protection, reducing industry burdens, improving behind-the-scenes operations and revising ECO. I have acted on these areas, and full details of the final policy are set out in the government response”, said Davey.

Changes to the policy include:

• Improved consumer protections such as restrictions on ‘cold calling’
• New rules requiring Green Deal Assessors to declare any commission they might be receiving for carrying out an assessment and their ties to Green Deal Providers
• Changes to the warranties proposal that relaxes requirements on businesses to hold warranties for the length of a Green Deal Plan, while maintaining robust minimum standards of protection for consumers, including 25 year warranties for wall insulation.

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

Provisions for the development of a Green Deal and a new Energy Company Obligation (ECO) were made in the Energy Act 2011 in order to replace the existing Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP), which both expire in 2012. The new policies are expected to boost the low-carbon economy by supporting up to 60,000 jobs in the insulation sector alone by 2015, up from around 26,000 today.

Monday’s announcement details the next steps to getting the Green Deal and ECO rules set by October 2012. This includes legislation that ensures £1.3bn a year to deliver energy efficiency measures across Great Britain to help tackle fuel poverty and climate change. An extra 100,000 households in low income areas could benefit each year in the revised proposals, which brings the total number of low income households assisted under the deal to around 230,000 a year.

Publications released on Monday alongside the government consultations include a final impact assessment and associated research, guidance about which measures will qualify for Green Deal Finance, clarity on which sectors fall within scope of ECO and confirmation of the appointment of Ofgem as ECO Administrator.

From August this year, accredited certification bodies and potential Green Deal Providers can submit applications to register as being ‘Green Deal Approved’. The first Green Deal plans will be signed in January 2013.

The latest publications on the Green Deal can be downloaded from the Department of Energy and Climate Change (DECC) website.