SUSTAINABILITY
attached come onto the market. As a result, it will be increasingly important that as an agent, you are aware of the facts and can talk knowledgeably to your customers about the implications.
A NUTSHELL? The Green Deal will help business and consumers to improve the energy efficiency of their properties without them having to pay for doing this upfront. Instead, the property owner or tenant can pay back the cost of the loan through instalments, which will be tagged to the property’s energy bills. The idea is that the cost of the loan will be covered by the energy savings. To qualify for Green Deal finance, the proposed changes must meet the Government’s ‘Golden Rule’. The key principle of the Golden Rule for
accessing Green Deal finance is that the charge attached to the bill should not exceed the expected savings and the length of the payment period should not exceed the expected life of the measures. There is still a lot of confusion
surrounding the Green Deal, with a lot of misinformation circulating and incorrect assumptions being made. Here, PEPA aims to set the record straight and to address some of the current misconceptions – which may be put to you by your clients.
Stephen O’Hara is Chairman of the Property and Energy Professionals Association (PEPA). The Property & Energy Professionals Association (PEPA) is a trade body which represents business that is engaged in the provision of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs). Members of the Association include companies that undertake and distribute EPCs and DECs, the accreditation schemes that oversee the products, the energy assessors that produce them and the technology companies that support the industry. PEPA members represent a wide range
of organisations, working within the energy space. Members include: NES Ltd; the BRE; Quest Associates; Elmhurst Energy; the CIBSE; Niche Communications; eTech; KeyAGENT and Northgate Information Services
www.pepassociation.org
Do you have any views to share?
www.propertydrum.com/articles/greendeal0812
SO WHAT IS THE GREEN DEAL IN
MYTH-BUSTING THE GREEN DEAL Myth
The Green Deal is too complicated – I wouldn’t even know where to start. Reality The Green Deal provider will take care of all the details for you. The options for improving the energy efficiency of your property will be clearly explained and the implementation will be undertaken by accredited installers. Once the installation is complete the repayment of a Green Deal loan comes directly from your electricity bill and will be set up automatically. We expect some homeowners will elect not take out a Green Deal loan and to use other sources of funds to pay for the energy improvements recommended in the Green Deal report.
Myth
It will put future buyers off if my home comes with a loan attached Reality If there is a Green Deal loan attached to the property the repayments come from the electricity bill. It is likely that the cost of the repayments will be offset by reduced energy bills as the energy efficiency of the property will have been improved by the Green Deal measures implemented. There are many buyers that are looking for an energy efficient property and implementing Green Deal measures and reducing carbon emissions may indeed help to sell the property.
Myth
It could make my home un-mortgagable in the future.
Reality The Council of Mortgage Lenders (CML) and the Building Societies Association (BSA) have both indicated that the existence of a Green Deal loan will not have any impact on the availability of mortgages.
Myth
It will end up costing me money to do. Reality In order for an energy efficiency measure to qualify for the Green Deal it must meet what is known as the ‘Golden Rule’. This rule stipulates that the cost of the measure must pay for themselves during their economic life – in other words it makes financial sense to implement Green Deal measures. In fact the Government
is considering using energy efficiency funding from the energy companies to help some measures to qualify for the Green Deal – in effect a subsidy! So rather than costing you money it is helping you to access energy efficiency funding.
Myth
It will take too many years for me to reap the benefits for it to be worth it. Reality The recommendations to improve energy efficiency will be many and varied. Some will have very quick pay back while others may take several years. The average time spent in a home is now over 12 years and therefore it is likely that the great majority of measures recommended will have a pay back during that time.
Myth
The Green Deal requires you to take out a Green Deal loan. Reality This is not the case. The Green Deal is about more than just the Green Deal loan. Indeed we expect many homeowners to get Green Deal Reports from qualified advisors and use Green Deal accredited installers but use other sources of funds to pay for the measures implemented.
Myth As a landlord, I can’t stop a tenant from signing up to this and then leaving me to foot the bill when they move on. Reality As a landlord the Green Deal provider must get your consent to implement any Green Deal measures and attach a Green Deal loan to your property.
Myth
Landlords will be liable if the tenant defaults. Reality The tenant, as the electricity bill payer, will be responsible - as is currently the case with energy bill defaults.
Myth
Only the tenant can take out the Green Deal loan Reality Either the landlord or the tenant can take out the Green Deal loan. However, as mentioned, the tenant will not be able to attach a Green Deal to a rental property without the consent of their landlord. In the same vein, the landlord will need to gain the consent of a sitting tenant in order to attach the Green Deal charge to their electricity bill.
PROPERTYdrum AUGUST 2012 37
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