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Consumer protection in the Green Deal 2: green deal finance

Posted by Linn Rafferty on 3 December 2012 at 10:19 am

In this second instalment of my blog about Consumer Protection in Green Deal, we’ll cover Green Deal Finance, and particularly the Golden Rule and savings estimates, and the role of Green Deal Advisors in explaining this to their customer.   


The Advisor needs to be completely confident with these concepts, as they are critical to protecting the customer from the risk that after Green Deal improvements have been installed, their total utility bills go up instead of down.  But first, let’s understand the difference between Advice and Information, and their different roles in Green Deal.



Energy Advice is defined as ‘specific to individuals and their circumstances, and aims to improve energy efficiency and achieve affordable warmth.’

Information, on the other hand, is more general in scope and not personal to the individual.  It is still important, particularly in raising awareness of the Green Deal.  Information sources, such as the Energy Saving Advice Service, DECC’s website, and Green Deal Providers, will give customers information about Green Deal, such as how to access it and what it offers.  Complementing this, actual advice (as defined above) will be provided by Green Deal Advisors, who will be quality assured, regulated, and impartial. 




Just like Installers, Green Deal Advisors must be properly qualified before they can offer services in Green Deal.  All Advisors, many of whom are currently working as Domestic Energy Assessors (DEAs), are required to pass a mandatory qualification covering all aspects of their specific role within Green Deal.  Once qualified, individual Advisors must work through an organisation (not necessarily their employer) that has had its quality assurance systems reviewed and passed by a Certification Scheme.  

This combination means that both the responsible organisation, and the Advisors themselves, have both been confirmed as competent to deliver the service.  Through their organisation, Advisors are continuously monitored, and quality is checked subsequently by the organisation’s Certification Scheme.  Thus there are two levels of quality check inherent in Green Deal, which provides significant reassurance that the advice provided is up to scratch.  

One aspect of this quality assurance will be to confirm that Advisors have acted impartially.  It is helpful that there are significant restrictions on Advisors working with providers, known as Tied Advisors, who might otherwise be tempted to steer their advice to benefit their own organisation.  Even these tied Advisors will be required to provide completely impartial advice, and this will be monitored. 

Although Advisors are permitted to work directly for Green Deal Providers, they must declare to their customer that they are tied to one Provider.  They must get the permission of their customer to offer any of the products or services supplied by the company they are tied to, and must immediately cease promoting that company’s services if the customer withdraws their permission at any time. These restrictions offer significant protection to the customer, whilst allowing the ‘one stop shop’ approach that research indicates is wanted by customers.



Whether tied or independent, all Advisors will be required to assess the energy efficiency improvements to see if they meet the Golden Rule.  

This consumer protection mechanism is at the absolute heart of Green Deal. 

The Rule determines the amount of Green Deal finance a Green Deal Provider can attach to the energy meter in any given property, and prevents the Provider from installing energy efficiency improvements that are unlikely to provide sufficient savings to cover their repayments. Essentially, it puts a cap on the repayment that can be required in year one, equal to the estimated difference in annual energy cost after the improvement is installed, compared to before – the typical saving for the improvement. 

Although in the Green Deal Advice Report it’s described as an ‘expected repayment’, this figure is actually a maximum payment – a ‘cap’.  This is because, to meet the Golden Rule, this calculated typical saving must equal (or exceed) the repayment.  For the less expensive improvements, such as loft insulation, the repayments are likely to be much less than this cap.  If repayments would be more than the cap, the Provider is not allowed to let the customer take out Green Deal finance for the full cost of that improvement.  

The Golden Rule gives customers the reassurance that at current energy prices their annual repayments won’t be more than the improvements are expected to save.  Customers can therefore improve their property without making any upfront payment for those improvements, and future proof their home against likely fuel prices rises in the future.

Green Deal customers can still choose to include improvements that don’t meet the Rule in their Green Deal plan, but in that case, they would need to provide some of the cost of installing it from other sources.  Some customers may want to use their own savings to provide this extra payment, and others will be able to access ECO funding.  ECO is the Energy Company Obligation, coming into play from January next year, which requires energy suppliers to provide funding for some energy efficiency improvements in some defined categories. This funding will be particularly helpful when installing more expensive improvements in older homes, such as solid wall insulation.

The savings estimates that set the cap on repayments are calculated using EPC standard occupancy, but with an in-use factor applied.  

In the next blog in this series, we’ll explain these terms, and look at how they provide further consumer protection to Green Deal customers

This blog is based on a talk the Linn gave at RetroExpo. It was first published on the JTEC Services website.

About the author: @linniR is a consultant, a freelance writer and a Domestic Energy Assessor accredited with the NHER scheme, and she enjoys all three.  She tweets regularly on issues relating to energy efficiency and renewables and provides consultancy, especially in relation to training needs.

If you have a question about anything in the above blog, please ask it in the comments section below.

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2 comments - read them below or add one

Linn Rafferty

Linn Rafferty from JTec Energy PerformanceComment left on: 10 December 2012 at 6:47 pm

Hello PSK, and thanks for your comment.  Energy bill arrears shouldn't prevent a customer from applying for a green deal.  However, Green Deal providers are required to lend responsibly, which will probably mean an assessment of their ability to pay. I don't know the impact of DWP payments and will post again if I find out any more.

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p suttonking

p suttonkingComment left on: 3 December 2012 at 10:42 am

Are individuals currently in arrears with their energy supplier able to apply for a green deal loan? If so will there be any assessment be done on their ability to pay? What about customers on direct payments from DWP ( fuel direct)?    

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