Government launches the Green Deal

The coalition has launched its flagship “Green Deal” initiative to encourage building owners to carry out energy efficiency improvements by removing up-front costs.

On 1 October the first part of the coalition government’s Green Deal legislation came into force. The legislation is designed to encourage building owners and occupiers to carry out improvements to buildings that increase the energy efficiency by removing up-front costs.

The scheme, which is to be rolled out initially to householders and businesses in non-domestic properties, will allow building occupiers to sign up to a Green Deal finance plan (currently anticipated to be available from 28 January 2013). Under the finance plan, a loan will be made to fund energy efficiency improvements works that have been pre-approved by a Green Deal assessor. Repayment of the loan will then be made in instalments through the energy bills for the property. There will be no requirement to repay loans before the property is disposed of, which means that any new occupier will take on responsibility for repayment of the loan. Sellers and landlords of property will be under a duty to disclose to prospective buyers or occupiers whether a Green Deal finance plan has been entered into, and the details of the plan will be revealed on the energy performance certificate for the building.

Further legislation is expected under the Green Deal to ensure that minimum levels of energy efficiency are met before properties can be let and to prevent residential landlords from unreasonably refusing consent to a tenant’s energy efficiency improvements.

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