Energy Efficiency and The Green Deal

Janet MillarSustainability Team

Bedford Borough Council

Presentation Outline:

1. Benefits of Improving Energy Efficiency

2. Upcoming Mandatory Standards3. Funding Sources:

• Green Deal • Energy Companies Obligation • Landlords Energy Saving Allowance• Enhanced Capital Allowances

1. Benefits of Improving Energy Efficiency

• Warmer home, lower bills for tenant• Fewer voids – more attractive to

potential tenants• Increase asset value • Reduces condensation & damp• House Health and Safety

Rating System• Improve Energy Performance

Certificate (EPC) rating

3. Upcoming Mandatory Minimum

Energy Efficiency Standards:

From April 2016:landlords may not refuse “reasonable” requests for consent from their tenants to improve the energy efficiency of their properties, where there is financial support available under the Green Deal and Energy Companies Obligation.

From April 2018:landlords should ensure their privately rented properties meet a minimum energy efficiency standard (likely to be set at EPC rating ‘E’) or that they have installed the maximum package of measures under the Green Deal and Energy Companies Obligation.

DECC announcement 02/12/13:

• Government will introduce a scheme to support private landlords in improving the energy efficiency of their properties, which will improve around 15,000 of the least energy efficient rental properties each year for 3 years.

4. Funding Sources:

• Green Deal • Energy Companies Obligation • Landlords Energy Saving Allowance

(LESA)• Enhanced Capital Allowances

Green Deal

What is the Green Deal?

• Government scheme to help householders make energy-saving home improvements with no up -front cost using loans from Green Deal Providers.

• Householders pay for some or all of the cost of energy-saving improvements over time through savings on their energy bills. The energy bill savings repay the loans with interest.

Private Landlords and the Green Deal

• Landlords will be able to make energy efficiency improvements without having to incur costs upfront.

• Tenants will repay the cost of the measures through their savings on their electricity bill whilst enjoying a warmer, more energy efficient home.

Permission

• Both the landlord and tenant must give permission for a Green Deal to be set up.

• Tenants will not be able to attach a Green Deal to a rental property without the consent of their landlord.

• Landlords will need to gain the consent of the tenant in order to attach the Green Deal charge to their electricity bill.

Green Deal Assessment

• To start, you or your tenant will need a Green Deal Assessment.

• Many different organisations including energy companies, DIY stores, and local trades people are authorised to do this.

• All Green Deal organisations must meet Green Deal standards and be authorised. Look for the quality mark:

• Assessment will take approx 2 hours• It will look at:

– the energy efficiency of the house – how the occupants use energy

• The report will:– include an EPC– recommend energy saving improvements that

are right for the home and meet the Golden Rule.

A selection of products included in the Green Deal:

Green DealOversight & Registration Body

• Maintains a searchable register of all authorised:– Green Deal Providers– Certification Bodies– Advisors – Installers

• Visit: http://gdorb.decc.gov.uk

Green Deal Cashback

• Landlords will be able to apply for cashback if they are paying for all or the majority of the costs of installing measures - either upfront or through a Green Deal Plan.

• If you want to get your tenants to pay for most/all of the cost of improvements -either upfront or through a Green Deal plan - then you will not be able to apply for Cashback.

Cashback Amounts:

• loft insulation - £100• cavity wall insulation - £250• front doors - £40• double glazed windows - £20 per m2 up • to a max of £320• solid wall - £650• boiler replacements - £270 for upgrade to

condensing boiler) etc.

Re-payment from Savings

• Measures must meet the:

‘Golden Rule’Loan repayments should never exceed the savings you make on your energy bills from the installation of measures recommended in the Green Deal assessment.

Payment Responsibility

• The tenant , as the electricity bill payer, will be responsible for the re-payments.

• If the tenant leaves and the property is vacant, the repayments will revert back to the landlord to cover the payment until the property is re-let.

• If a bill payer defaults on their electricity bill, the landlord will not be held liable. The electricity company will use their normal collection processes.

New Tenants:

• When renting out a property with a Green Deal -tenants need to be made aware of this and acknowledge the repayments they need to make.

• Landlords need to provide tenants with a copy of the EPC showing:– the improvements that have been made under the

Green Deal– the repayment amounts the electricity bill payer needs

to make– the length of the Green Deal– the name of the Green Deal Provider.

Energy Companies Obligation (ECO)

• Some householders in older properties , and those on benefits or low incomes may qualify for extra financial assistance through ECO.

• Funded by energy suppliers through a levy on all domestic energy bills.

• Replaces the Carbon Emissions Reduction Target (CERT) and is designed to work alongside the Green Deal.

3 Obligations:

HHCRO:Home Heating Cost Reduction Obligation

CERO:Community Emission Reduction Obligation

CSCO:Carbon Saving Community Obligation

HHCRO: Home Heating Cost Reduction Obligation

• Also known as ‘Affordable Warmth’.• Financial support to install:• cavity wall insulation and loft insulation and

repair or replace boilers.• Eligibility:

– Household must be privately owned or privately rented

– Must be in receipt of certain means-tested benefits

CERO: Carbon Emissions Reduction Obligation

• Focuses on ‘hard to treat’ homes -measures that cannot be fully funded through the Green Deal as they do not meet the ‘Golden Rule’:– solid wall insulation – ‘hard to treat’ i.e. narrow cavities – loft can be provided as a

secondary measure

CSCO: Carbon Saving Community Obligation

• Focuses on the provision of insulation measures: – cavity wall– solid wall – loft insulation

to domestic energy users that live within an area of low income.

Deprived LSOAs in Bedford:

LSOA Code LSOA Name Ward Code Ward Name

E01017471 Bedford 012F 09UDGH Castle

E01017466 Bedford 012A 09UDGH Castle

E01017477 Bedford 015F 09UDGJ Cauldwell

E01017472 Bedford 015A 09UDGJ Cauldwell

E01017490 Bedford 007C 09UDGN Goldington

E01017502 Bedford 010F 09UDGQ Harpur

E01017523 Bedford 014F 09UDGW Kingsbrook

E01017519 Bedford 014B 09UDGW Kingsbrook

Energy Saving Advice Service:

• Tenants can contact:

0300 123 1234 to find out if they are eligible and to be referred to an ECO scheme.

• Or visit: www.gov.uk/energy-grants-calculator

Safe, Healthy and Well

• www.bedford.gov.uk/safehealthywell

4. Landlord Energy Saving Allowance (LESA)

• Introduced to encourage landlords to improve the energy efficiency of let residential properties.

• An allowance for the cost of acquiring and installing (unless you install them yourself) certain energy-saving items.

• Allows landlords to claim up to £1,500against tax every year.

Energy Efficiency Measures:

• cavity wall and loft insulation (after 6 April 2004)

• solid wall insulation (after 7 April 2005)

• draught proofing and hot water system insulation (after 6 April 2006)

• floor insulation (after 6 April 2007)

How to apply:

Claim the allowance when filling in your tax return up to 1 April 2015 :

• when you fill in your Self Assessment tax return - if you rent out your property as an individual.

• under ‘allowable business expenses’ on your Company Tax Return form - if you rent out your property as a business.

To find out more about LESA:

• Contact your accountant or tax advisor• Contact your local tax office• Visit: www.gov.uk/landlords-energy-

saving-allowance• Visit:

www.hmrc.gov.uk/manuals/pimmanual/PIM2072.htm

4. Enhanced Capital Allowances

• Can be claimed by landlords that pay corporation tax, larger landlords and businesses.

• Provides landlords with the opportunity to claim 100% of the tax back on any energy saving technology that they buy.

• List of energy technologies that are eligible - Enhanced Capital Allowance website: https://etl.decc.gov.uk/etl/site.html.

Further Information:

• For more information on Green Deal visit: www.gov.uk/greendeal

• Janet Millar - Climate Change Officer� Janet.millar@bedford.gov.uk� 01234 718259� www.bedford.gov.uk/sustainability