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The Green Deal - Paradigm Shift In Energy Efficiency

Date: 21 December 2010

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6 pages

Executive Summary

The Green Deal aims to facilitate the upgrading of UK building stock, both domestic and non-domestic, through a pay-as-you-save financing model. Legislated through the Energy Bill, which was introduced to the UK parliament in December 2010, the Green Deal will be administered and funded by national utility companies independently or in partnership with third party financial houses. Building landlords or tenants will not face any costs upfront – as the payback structure will be tied to a building’s energy bill – meaning tenants or owners will not see their ability to sell or move property affected. Independent energy auditors will assess each property; accredited tradesmen will carry out their recommendations for improvements. This multi-stakeholder model aims to manage risk by institutionalising a ‘check and balance’ system between participants. The principal issues to be resolved are the unsecured nature of the liability and the cash flow risk from vacancy periods.

TABLE OF CONTENTS

NEW FINANCING INITIATIVE FOR NATIONAL RETROFIT PROGRAMME
The Green Deal To Target Building Retrofits To Boost Energy Efficiency
Multi-Stakeholder Structure Aims To Spread Risk Evenly
Innovative Financing Structure Ties The Liability To The Building
Unsecured Nature Of The Debt Risks Increasing The Scheme’s Costs

COMPANIES MENTIONED

Aviva, British Gas, Carbon Trust, Centrica, Department of Energy and Climate Change, Legal & General, Office of Fair Trading, YouGov.