The Green Deal and Energy Company Obligation (ECO): Frequently Asked Questions

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Anthony Kelley
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1 The Green Deal and Energy Company Obligation (ECO): Frequently Asked Questions This document should help answer key questions you may have about the Green Deal and the Energy Company Obligation. Some of these questions are explained more fully in other resources within PlanLoCaL. The questions here are divided into subsections to help you find an answer quickly and easily. Contents 1. Advice 2. Assessment 3. Consumer Protection 4. Early bird incentives 5. ECO funding 6. Eligibility 7. Finance 8. Installation 9. Payments 10. Providers Advice Where can I go to get impartial advice? The Government funds the Energy Saving Advice Service, which is a centralised service managed by the Energy Saving Trust offering impartial advice to customers and businesses. You can call: for the Energy Saving Advice Service in England and Wales to find your closest Energy Saving Scotland advice centre In many places you will also be able to access impartial advice provided by local organisations. Contact your local authority to find out about local services and organisations. Assessment Who will carry out the assessment? What is a Green Deal Advice Report? How much will a Green Deal Advice Report (GDAR) cost? What will happen when a Green Deal Advisor visits my home? Who will produce the post-installation EPC? Does it need to be the same advisor? continued...

2 Why do the savings in my EPC differ from the occupancy assessment? Why are the estimated energy costs on the EPC different to what I actually spend? Why is the EPC suggesting an improvement that I know is unsuitable for my property? How can I be sure that the assessment is impartial? What qualifications do I need to become a Green Deal Advisor? Who will carry out the assessment? An assessment must be completed by a certified Green Deal Advisor who is a member of a Green Deal Advice Organisation (GDAO). You could commission an assessment directly or through a Green Deal Provider. What is a Green Deal Advice Report? It is made up of two assessments: 1 An Energy Performance Certificate (EPC) this tells you how energy efficient a building is, with a score which corresponds to an energy efficiency rating in bandings which go from A (very efficient) to G (inefficient). The EPC also gives estimates for how much it will cost to heat and light the building, and what its carbon dioxide emissions are likely to be. 2 An Occupancy Assessment this is an assessment of how energy is used at home and considers factors relating to the number of occupants, heating system use, hot water use, use of appliances and cooking and fuel bills and tariffs. How much will a Green Deal Advice Report cost? We currently believe the market rate will be around 200 per assessment including VAT. However, there is likely to be a mix of offers when it comes to assessments. Some Providers might choose to offer free assessments initially to generate interest, and organisations like local authorities might choose to subsidise the cost. What will happen when a Green Deal Advisor visits my home? To conduct the EPC the advisor will need to gather lots of data about the property s construction, insulation and heating system. For the Occupancy Assessment the advisor will need to ask you questions about how energy is used in the house. The whole process should take between one and two hours. Who will produce the post-installation EPC? Does it need to be the same advisor? Following installation, a Green Deal Provider will need to produce a new EPC that shows the improvements made. It may be possible to update this remotely, removing the need to visit the property again. Why do the savings in my EPC differ from the occupancy assessment? The figures in the Occupancy Assessment will be different to that of the EPC due to the application of in-

3 use factors. This reflects the fact that there is often a difference between how a product performs in theory and in practice. Why are the estimated energy costs on the EPC different to what I actually spend? Because the EPC works on assumptions about how energy is use in the property, the figures it produces can never be wholly accurate. The idea of the Occupancy Assessment is to gather additional information about how you live to refine these estimates and enable more accurate calculations to be made. Why is the EPC suggesting an improvement that I know is unsuitable for my property? Some properties are classed as non-standard and the energy performance of these buildings is difficult to model within the simplified ( reduced ) version of the Standard Assessment Procedure (RdSAP) that is used. The Government and industry are looking into how they can better incorporate such properties into EPCs and future updates of RdSAP are likely to include improvements to this. How can I be sure that the assessment is impartial? Green Deal Advisors must clearly declare whether they are independent or tied to a Provider. Mechanisms are in place to ensure that Providers cannot withhold payment from Advisors where an impartial assessment does not lead to a sale. What qualifications do I need to become a Green Deal Advisor? To become a Green Deal Advisor you will need to undergo training which will vary depending on whether you already work in the industry as an Energy Assessor or are a new entrant. It will also vary depending on whether you want to work in the domestic or non-domestic sector. For more information visit Asset Skills : Consumer protection What protection is available for customers? What if the product breaks down or fails? Will Green Deal measures impact on house value? What protection is available for customers? All assessors, installers and providers must be accredited. This shows that they comply with United Kingdom Accreditation Service (UKAS) certification schemes. What if the product breaks down or fails? Most products have a warranty of 5 years and an extended 10 year guarantee to cover any building

4 damage sustained as a result of the measures installed. Solid and cavity wall insulation is covered under warranty and building damage for 25 years. Will Green Deal measures impact on house value? The Green Deal finance will be attached to the property, not the person. This means that a homeowner can sell their property with the finance still attached; the new owner would agree to take responsibility for the repayments and would benefit from the improvements. However, we do not know whether the market will perceive this positively or negatively or precisely how it will affect a home owner s ability to sell a property. Early Bird incentives What cash-back offers are currently available for customers? Are there incentives for Green Deal Assessors, Installers and Providers? What cash-back offers are currently available? These may change over time, but in the early stages of Green Deal there are likely to be a range of incentives to encourage householders to take up Green Deal plans. From 28/1/13 a national cash back scheme will be available for a limited number of householders. The rates vary per measure: from 650 for solid wall insulation to 10 for hot water cylinder insulation. There is more information available here: Are there incentives for Green Deal Assessors, Installers and Providers? Our understanding of current plans is that during the first two years of the scheme there will be no registration fees for organisations or individuals to become Green Deal Assessors, Installers or Providers. However, there will be a cost associated with accreditation and training. See Energy Company Obligation (ECO) funding What is the Energy Company Obligation (ECO)? What is ECO Carbon? What is ECO Carbon Saving Communities? What is ECO Affordable Warmth? What is the Energy Company Obligation (ECO)? ECO is a separate (but complementary) policy to the Green Deal. Its overarching objectives are to reduce domestic carbon emissions and alleviate fuel poverty. ECO is an obligation on energy suppliers with more than 250,000 customers to fund three different ECO grant schemes: 1. Carbon Saving obligation - ECO Carbon 2. Carbon Saving obligation - ECO Carbon Saving Communities 3. Affordable Warmth obligation

5 The initial obligation period runs for 30 months from the 1st October 2012 to 31st March 2015 and there are no current plans to set interim targets.. What is ECO Carbon? This is the supplier obligation to grant funding towards measures which do not meet the Golden Rule. All households are eligible provided their GDAR recommends measures which will not meet the Golden Rule. For many properties it is likely that solid wall insulation will be the only measure which meets these criteria. Other measures may be eligible for this support if installed as part of a package i.e. several improvements, likely to include solid wall insulation, being made to a property at the same time. What is ECO Carbon Saving Communities? This is the obligation to provide grants of up to 100% of the cost of improvements, principally insulation measures, for people living in low-income communities, defined using the bottom 15% of Lower Super Output Areas from the Index of Multiple Deprivation. What is ECO Affordable Warmth? This is to deliver fuel bill savings for those most at risk of fuel poverty (multiple benefits, low-income and vulnerable households) to access up to 100% grants. Grants are calculated based on the monetary savings a customer could make on their fuel bill. Any Green Deal measure is eligible which results in a reduction in the notional heating costs to the household. Eligibility Who can get a Green Deal? Is a credit check required? I live in a park home, can I get help? Can you get an existing extension insulated through ECO or the Green Deal? Can I get a new extension or loft conversion insulated through ECO or the Green Deal? Can home owners off the gas grid get Green Deal finance to connect them? Can I pay back my Green Deal plan if I am with a smaller electricity supplier? Who can get a Green Deal? Almost anyone who owns or rents their home, owners of non-domestic buildings (including business premises and community buildings) and in some cases groups who have long term leases on nondomestic buildings. Tenants will always need permission from their landlord. Is a credit check required? Yes, a customer would need a credit check to access Green Deal finance. However, the threshold for Green Deal credit checks would be set much lower than for conventional loans, and ECO grants would not be dependent on a credit check.

6 What measures are available under the Green Deal? Currently there are 45 energy saving measures eligible for Green Deal finance. It is entirely possible that as time goes on, more measures will be added. The current list is shown in the Green Deal Measures PlanLoCaL information sheet. Note that not all measures will be available under all funding streams (i.e. Green Deal finance and the different strands of ECO). Theoretical eligibility is listed here but in reality will be determined by a Green Deal Advice Report and by the market rate for each element of ECO and Green Deal finance. I live in a Park Home, can I get help? At the moment Park Homes cannot be assessed using RdSAP so it is not possible to have an EPC drawn up, or GDAR produced. In theory, you could get ECO support but this depends on whether the ECO administrator has configured an approved methodology for calculating the ECO provision. This is likely to change in the future, as RdSAP may be updated to account for park homes. Can you get an existing extension insulated through Green Deal finance and/or ECO? With Green Deal finance you should be able to get an extension insulated. ECO will probably stipulate that the whole house (or most of it) must be insulated, so will not provide a grant for the extension alone. Can I get a new extension or loft conversion insulated through ECO or the Green Deal? New building works must comply with Building Regulations, which already stipulate that insulation must be installed. Insulation which must be installed under Building Regulations will not be eligible for ECO funding or Green Deal finance. Can home owners off the gas grid get Green Deal finance to connect them? No, not at the moment. Can I pay back my Green Deal Plan if I am with a smaller electricity supplier? Since a Green Deal Plan is paid back through your electricity bill, your electricity supplier must be signed up to the Green Deal repayment mechanism to accept payments. Whilst all large electricity suppliers (more than 250,000 customers) are obliged to sign up to this mechanism, smaller electricity suppliers are not obliged to do so, although they can opt in to the mechanism. If you are with a smaller electricity supplier which is not signed up to the Green Deal repayment mechanism, you will need to switch suppliers to access Green Deal finance. When we spoke to Ecotricity and Good Energy (January 2013) they had no current plans to opt in to the Green Deal.

7 Finance Who lends the money? What interest rate will be applied to the finance? How long is a Green Deal Plan valid for? Can the Green Deal be used with feed-in tariffs or the Renewable Heat incentive? What happens if a house has a Green Deal loan but the energy use in the building doesn t become reduced after the measures are fitted, i.e. it doesn t meet the golden rule? What happens if a house with a Green Deal loan becomes unoccupied / stops using gas and electricity? What other finance options are available? What happens if I want to move house? Who lends the money? A not-for-profit consortium called The Green Deal Finance Company (GDFC) will provide access to finance for Green Deal Providers. Providers will then offer finance, in the form of a Green Deal Plan, to enable installation of energy saving measures. What interest rate will be applied to the finance? It is currently expected to be between 6.5% - 9.5% APR. How long is a Green Deal Plan valid for? This will depend how quickly you wish to pay back the Green Deal loan. The maximum loan length is likely to be capped at the lifetime of the measure installed. But if you choose, you can pay back the loan more quickly and reduce the length of the Green Deal Plan. Can the Green Deal be used with feed-in tariffs (FIT) or the Renewable Heat Incentive (RHI)? The simple answer is yes for both. Households wishing to install solar PV and benefit from FIT payments should be aware that their house must have a minimum of a D band EPC to qualify for the high rate tariff. DECC are suggesting that anyone wanting to receive the RHI for new installations will first have to have carried out all the green ticks on their Green Deal assessment. What happens if a house has a Green Deal loan but the energy use in the building doesn t go down after the measures are fitted, i.e. it doesn t meet the golden rule? This may happen if the building user(s) start to use more energy (e.g. turn up their thermostat) and enjoy extra benefits of a warmer home. The golden rule is a guide and not mandatory, and if they do this, they will end up with higher bills plus repayment as a result. There is more guidance on this in the PlanLoCaL resource Getting the best out of your energy efficiency improvements.

8 What happens if a house with a Green Deal loan becomes unoccupied / stops using gas and electricity? The repayments are still added to the bill alongside the standing connection charge. In the unlikely event that someone becomes disconnected completely, the charge will remain and they will still be requested to pay it off. What other finance options are available? Measures could be paid for up front if you have savings. You could use a low interest loan (for example with a credit card) or you might consider increasing your mortgage to pay for energy efficiency improvements. Some low interest loans, for example Wessex Home Improvement Loans, are local authority endorsed and are specifically designed to fund home energy efficiency improvements. What happens if I want to move house? A Green Deal Plan is attached to the property, not the individual. This means the Green Deal Plan will remain with the property once you move house. A landlord or home owner wishing to rent or sell a property with a Green Deal Plan attached must disclose this information to the prospective tenant or buyer. Installation How can I find a Green Deal installer? Can I use my local installer? How can I find a Green Deal installer? Search for installers on the Green Deal Oversight and Registration Body Site: Can I use my local installer? Only if they are Green Deal certified. You can check using the website above. Payments Can customers with pre-payment meters take out a Green Deal plan? Can customers with a Green Deal plan still switch energy supplier? Can customers with pre-payment meters take out a Green Deal plan? Yes. However the customer must pay back the Green Deal loan in the same way that arrears are collected, since current prepayment meters do not have the facility to incorporate Green Deal payment.

9 Can customers with a Green Deal plan still switch energy supplier? Yes, you will be able to switch between all fuel suppliers participating in the Green Deal payment collection mechanism. However, it will not be possible to switch to a supplier if they are not participating. Providers How can I find a Green Deal provider? Search for providers on the Green Deal Oversight and Registration Body Site:

Top actions you can take to save money and make your home more efficient

Top actions you can take to save money and make your home more efficient You can use this document to: Energy Performance Certificate (EPC) Dwellings Scotland 2 Newton Steadings, Newton Steading, Glencarse, Perth, PH2 7FB Dwelling type: Mid-terrace house Date of assessment: