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Is the Green Deal a Good Deal?

The Green Deal expalined: four easy steps.

What is the Green DealDavid Hilton, an advisor to the NSBRC, has completed various self builds in South Africa and renovations in the UK and has been involved in designing and installing solar and heat pump systems since the early 1980s. Here, he explains the Green Deal and how it will work for you.

October often means the heating going on, but this year this might not mean bills going up as it also marks the start of the government’s energy-saving initiative – The Green Deal.

That means that you’ll be able to pay for energy-efficiency improvements with the savings on your energy bills – and pay nothing upfront!

Seems too good to be true? Here’s how it works:

The Green Deal 4 stage process

Stage 1: Assessment

This is carried out in your home or business by a Green Deal Advisor. Using standardised software they identify which improvements can be made and what the potential financial savings could be. There are around 45 measures currently approved for funding. These include:

–  insulation

 – heating and hot water

 – glazing

 – microgeneration

Crucially, all savings identified must meet the Golden Rule: that payments made for the improvements cannot be higher than the estimated energy bill savings they will make.

Stage 2: Finance

Next the Advisor outlines options available from Green Deal Providers to fund the improvements.

If you take up an offer, you’ll sign a Green Deal Plan, which is a contract between you and your chosen Provider. Interest is charged on payments, but the rate is fixed. The Green Deal Finance Company expects this rate to be around 6 to 8% but Providers will set it. Some Providers might also charge an early repayment fee for plans over 15 years but any fee must be disclosed up front.

Stage 3: Installation

The Green Deal Provider will arrange for a certified Green Deal installer to come and carry out the agreed work. Each installer will have been vetted to ensure they meet the required standards. 

Stage 4: Repayment 

The cost of the improvements are paid back over time through your electricity bill, your electricity supplier passing these payments through to your finance Provider on your behalf. The amount you pay will be covered by the reduction in your energy costs as a result of the energy saving improvements you have made.

The Green Deal differs from other loans as the charge is attached to the electricity meter in your house therefore If you move out before the costs are fully paid they pass to the new occupant of the house who is the person now benefitting from a more energy-efficient property.

From October 2012 there will be Green Deal approved assessors and installers and assessments can be carried out. The Green Deal repayment process does not launch until 28th January 2013 however, so although Green Deal Installers can carry out installations from October 2012, they must be funded outside of the Green Deal.

Still confused? –  Come and talk to me at The Big Green Show – the UK’s largest one-stop show covering every element of green construction and retrofit.

The show runs from 26th-28th October and is FREE to attend if you book your ticket in advance by visiting the NSBRC website at or by calling  0845 223 4455

Learn more:

What is the Green Deal? – Our guide to all things Green Deal.

Insulation guides – All you need to know about insulation.