OPINION: REGULATIONS


DEAL OR NO DEAL?


The Energy Act has ushered in the Green Deal, but many questions about its implementation and the impact on landlords remain to be answered, writes Hywel Davies


The Energy Act is the legal basis for introducing the coalition


government’s flagship energy and environment policy, the Green Deal. The Green Deal proposes a new finance framework to enable permanent improvements to the energy efficiency of a property to be funded by a charge on the electricity bill.


The key condition for any Green


Deal finance package, whether for domestic or non-domestic property, is that the energy savings will reduce the energy bill by more than the annual repayments on the Plan, which is referred to as the Golden Rule. The Green Deal avoids the need for the property owner or tenant to pay for the improvement up front. The Act also creates a new


Energy Company Obligation (ECO) that replaces the existing Carbon Emissions Reduction Target (CERT) and Community Energy Saving Programme (CESP), which expire at the end of 2012. The ECO will supplement Green Deal finance for appropriate measures for vulnerable and low-income households likely to need additional support and in ‘hard- to-treat’ housing. As well as the framework for the Green Deal, the Act establishes a


achieve and maintain a specified level of energy efficiency for a property as defined by the energy performance certificate. If the level of energy efficiency falls below the specified level, the landlord will not be allowed to let the property until such energy efficiency improvements as can be funded under the Green Deal are carried out. Failure to do so may result in a


Not all tenants will appreciate the onset of improvement works


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Landlords now need to start thinking about the energy efficiency of their buildings


legal mechanism for introducing energy efficiency regulations for privately rented homes and for non- domestic properties, with separate provisions for Scotland. In both cases the regulations will apply where the required provisions can be funded via the Green Deal (and so must meet the Golden Rule). The key difference between the two jurisdictions is that, in England and Wales these regulations must be introduced by 1 April 2018, whereas in Scotland they may be introduced, but not before April 2015. These regulations, which are yet


to be drafted or consulted on, and are not expected to feature in the initial implementation phase of the Green Deal, may compel a landlord to


fine of up to £5,000 for domestic properties, or possibly more for non-domestic, subject to the provisions adopted in the regulations. Enforcement will be the responsibility of local weights and measures authorities, who have already had several years’ experience enforcing the Energy Performance of Buildings regulations. There is an added requirement for landlords of private domestic rented properties: these landlords will be required to meet reasonable requests by tenants to take out a Green Deal Plan or obtain ECO funding for work to improve the energy efficiency of the property from 2016. This may prompt questions about


how this legislation squares with the government’s ‘one in, one out’ commitment. This requires any new regulation to be cost-neutral, or else


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20 CIBSE Journal December 2011 www.cibsejournal.com


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