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Green Light for Green Deal

posted by Tom Whitehead on 13 June 2012

tags: Green Deal ,

So, the DECC have now published their response to the consultation and now the race is on for Green Deal Providers to be ready to launch their services by October.

The response clarifies many things and DECC have shifted their position on a number of points in response to the consultation.  The key findings were:

Strengthening Consumer Protection

  • DECC have clarified that assessors will need to declare to customers if they are tied to Green Deal Provider (GDP) or acting independently including whether they are receiving commission for any part of their service
  • GDPs will be prevented from withholding payments to affiliated assessors if the assessment does not proceed to a sale
  • A new 1 day cooling off period between a cold call and an appointment is being introduced
  • GDPs will need to obtain written acknowledgement from a customer if they are lower than average energy users and their Green Deal charge may not be fully offset by their energy savings
  • Interest will be restricted to a fixed rate but GDPs (or their finance partners) can have the option to set an uplift of 2% per year in line with inflation but this must be set out at the outset  
  • The dispute period for non-disclosure for customers inheriting Green Deal charges has been extended to 90 days

Reducing Industry Costs

  • Warranty requirements have been revised. Green Deal Providers to offer a guarantee in respect of improvements for a minimum period of five years and an extended 10 year guarantee to cover any consequential building damage sustained as a result of the measures being installed
  • This is extended to 25 years for Solid Wall and Cavity Wall where existing, cost effective guarantees already exist
  • Repayments are no longer restricted to guarantee period but GDPs will need to make a fair assessment of the life of the product
  • The requirement to have an independent Conciliation Service has been removed but is now encouraged
  • The requirement to have surety bonds in place for GDPs in the case of insolvency has been removed
  • The Green Deal Code of Practice has been strengthened
  • There will be no formal requirement for manufacturers to confirm compliance with the Code of Practice and to register their products with the Oversight Body

Improving behind-the-scenes operations

  • There will be a generic statement to be placed on bills to help consumers understand the Green Deal charge and its relation to their energy bill
  • Admin fee for energy suppliers has been revised to a daily fee of 1p/day for large suppliers and 2p/day for smaller suppliers with a levelisation to prevent GDPs paying more than 1p/day/plan per quarter
  • A separate Green Deal Collections database has been abandoned in favour of an existing data transfer system

Revising the Energy Company Obligation

  • A third ECO level has been introduced, the Carbon Saving Communities Obligation
  • "This is designed to target insulation measures in low-income communities defined using the bottom 15% of Lower Super Output Areas from the Index of Multiple Deprivation, or equivalent indexes in Scotland and Wales"
  • "suppliers will be required to deliver 15% of their overall Carbon Saving Communities Obligation to rural, low income households in settlements with a population size under 10,000"
  • "ECO scores will calculated based on property specific information (such as the SAP) rather than deemed scores so these reflect the benefits delivered over the expected lifetime of the measures installed."
  • energy suppliers will be able to deliver both SWI and  non-standard cavity wall insulation under the ECO Carbon Saving obligation
  • boiler repairs to be included as an eligible measure, provided that the repaired boiler is accompanied with a level of aftercare for the household.
  • district heating will be eligible under the ECO Carbon Saving obligation when connections are delivered as part of a package that also includes SWI or non-standard cavity insulation
  • a brokerage mechanism in place for when the Green Deal start.  DECC are going to consult further on this.

Evaluation of the Green Deal and ECO

  • DECC have set out their plans for evaluating Green Deal and ECO

USEA will be assessing carefully the implication of the above responses and how it may affect their plans for setting up a Green Deal Provider CIC.

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