The Green Deal provider is the counter-signatory to the Green Deal plan and responsible for both the provision of finance and arranging the energy efficiency works.
What are the responsibilities of a Green Deal Provider?
The Green Deal Provider is responsible for:
- Offering a Green Deal Plan to customers, based on recommendations from an accredited assessor. The plan sets out the financial terms of the agreement and must also include extra consumer protections such as warranties to cover the measures and installation.
- Arranging for the installation of energy efficiency works, carried out by an authorised installer.
- Ongoing obligations in relation to Green Deal plans, including dealing with customer complaints and providing information when a new bill payer moves in.
How will the Green Deal Provider role work in practice?
Green Deal providers may choose to carry out the assessment and supply of goods and installation using their own employees, or they may sub-contract this as illustrated in the diagram below.
How do I become a Green Deal Provider?
In order to become an authorised Green Deal provider and operate in the market, companies will be required to:
- Sign up to and comply with the Green Deal Code of Practice;
- Sign up to the Green Deal Arrangements Agreement, a contractual agreement between Green Deal Providers and electricity suppliers governing the payment collection and remittance process;
- Hold a valid CCA licence (if they wish to offer Green Deal plans for domestic properties);
- Make appropriate provisions to provide protection for customers in the event the Green Deal provider becomes insolvent or loses its license;
- Provide an appropriate independent conciliation process to help resolve customer complaints;
- Pay the required fees to the Oversight Body for authorisation.
What is the Golden Rule principle?
The Golden Rule is the principle which limits the amount of Green Deal finance that a provider can attach to the energy meter to the estimated energy bill savings that are likely to result from the installation of measures under the Green Deal plan.
This principle aims to keep the energy bills at the property no higher than they would have been had the property been without a Green Deal – this is important both to protect consumers from higher energy bills, and to protect investors from a higher risk of default on the bill.
How will the principle apply in practice to Green Deal plans?
The first year savings estimate will be provided by the assessment, and this will limit the charge in year one. For domestic properties, we are proposing the charge can either remain the same in subsequent years, increase by 2% each year or that the interest rate can vary in line with an index closely associated with energy prices. For non-domestic plans, we are allowing more flexibility and are not proposing to restrict applicable interest rates.
What costs will be included as part of the Green Deal Finance?
We are proposing to allow Green Deal providers to include the following costs in a Green Deal plan.
- Preparatory/Make good costs – requirement for the fabric of the room or wall to be restored to same condition as before the work was commenced.
- Unexpected costs - if unexpected problems such as damp are found, the Green Deal provider will be required to obtain the necessary consents for a revised Green Deal plan before continuing with any work. Unexpected costs can be included up to the limit of the Golden Rule.
- Cost of the assessment – customers will have the ability to include the cost of the assessment in Green Deal finance if desirable and if this option is made available by the Green Deal provider.
- Cash back - It is likely that Green Deal providers will offer all kinds of incentives as part of the finance package. To reduce the potential for fraud and reputational damage, if Green Deal providers wish to offer a cash incentive, we are suggesting they will be limited to offering either 5% of the total cost of the Green Deal package or £150, whichever is less.
Will Green Deal Providers be able to lever other sources of funding to augment Green Deal Finance offers?
Yes. For example, accredited Green Deal Providers and ECO suppliers will have the option to form partnerships to deliver measures cost effectively.
How will consumers be protected in the event a Green Deal Provider breaches its responsibility?
If the customer experiences a problem associated with their Green Deal plan, the Green Deal provider will always be the first point of contact. The Green Deal provider will investigate the problem and provide redress if necessary, seeking compensation from their contractors if appropriate. If the customer is not happy with the remedy provided, they will be directed to the independent conciliation service, provided by the Green Deal provider or either the Financial or Energy Ombudsman Services if preferred.
Discussion Paper – Green Deal Incentive Scheme
DECC is currently developing policy on a planned Green Deal incentive scheme. To inform this process DECC has shared a paper with pioneer providers, seeking input on certain technical aspects of how the scheme might work in order to ensure the optimal customer experience.
The paper is not government policy; it is meant as a simple, in draft discussion paper. The scheme as described is also subject to further consideration of state aid implications.