One year to Green Deal - Energy Act becomes law

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Energy Act has become law setting in stone the legal framework for the Green Deal, which will be launched in Autumn next year. The Green…

The Energy Act has become law setting in stone the legal framework for the Green Deal, which will be launched in Autumn next year.

The Green Deal will revolutionise the energy efficiency of the nation’s homes and businesses. It will help people insulate against rising energy prices, creating homes which are warmer and cheaper to run.

DECC’s new “Housing Energy Fact File”, published today, highlights that more than half of homes in Great Britain don’t have sufficient insulation.

It shows around 50% more energy is used to heat and power homes than is used to power UK industry. It is vital, therefore, that action is taken to address home energy efficiency.

Energy and Climate Change Secretary The Rt Hon Chris Huhne MP said:

“A huge hurdle has been passed in bringing the Green Deal closer to making homes warmer and cheaper to run. The coalition is doing all it can to bear down on energy prices, but insulation will provide the long term help to manage bills. When it’s introduced, the Green Deal will be as easy as ABC by making work affordable, providing bespoke independent advice and choice in the market from well-known and trusted high street names.”

Climate Change Minister Greg Barker said:**

“As well as helping people save money through home energy improvement , the Green Deal will be a massive business opportunity. It’s expected to attract capital investment of up to £15 billion in the residential sector alone by the end of this decade and at its peak, the Green Deal could support around 250,000 jobs.”

The key elements to the Act will:

  • Remove the upfront cost of energy efficiency measures (like loft, cavity and external wall insulation, draught proofing and energy efficiency glazing and boilers) making expensive home improvement affordable. For the first time in the world, the energy saving work will be repaid over time through a charge on the home’s energy bill. The repayments must obey a “golden rule” whereby the charge is no more than the expected savings, meaning householders should save from day one.
  • Put consumer protection at the heart of the Green Deal. High standards will be crucial from the first independent home energy assessment to getting the job done by qualified installers. All Green Deal participants will need to carry a “quality mark” so customers know they can be trusted to do a good job.
  • Provide extra financial help for the most vulnerable and hardest to treat homes by getting energy companies to fund work like basic insulation and boiler upgrades as well as helping those living in homes where the cost of the work, like solid wall insulation, may not obey the “golden rule” without extra money to make it affordable.
  • Improve at least 682,000 privately rented homes. From April 2018 it will be unlawful to rent out a house or business premise which has less than an “E” energy efficiency rating.

This latest milestone comes just weeks after the first finance consortium was announced promising to provide low cost interest rates on Green Deals. The Green Deal Finance Company has the potential to offer a better deal for the consumer and to support healthy competition amongst Green Deal providers including small businesses.

How the Green Deal will work for consumers

Green Deal flowchart

Notes for editors:

  1. View the full details of the Energy Act 2011 on the Parliament website.
  2. In the next year, work will continue to get Green Deals ready for market. The timeline is as follows:

End Oct 2011 - formal consultation on secondary legislation
Spring 2012 - secondary legislation laid before Parliament
Autumn 2012 - first Green Deals appear

  1. DECC has published the “Housing Energy Fact File 2011” for Great Britain. This document aims to draw together important data about energy use in homes in Great Britain since 1970.
  2. On 3rd October, consultancy firm Price WaterhouseCoopers announced the signing of a Memorandum of Understanding to develop the business plan for a not-for-profit organisation called the Green Deal Finance Company. The company has 16 members including household names such as British Gas, EON, Kingfisher (B&Q) and HSBC.