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Green Deal for landlords to improve energy efficiency

Monday 09 October 2017

Landlords can benefit from a Green Deal which funds energy improvements using ‘loan to the property’ financing, where costs are repaid through energy bills, ahead of tough new rules that will come into force over the next few years.

From April 1, 2019, MEES (Minimum Energy Efficiency Standards) apply to new lets and renewals of tenancies, and for all existing tenancies from April 1, 2020, after which dates it will be unlawful to rent properties that don't have a minimum energy efficiency rating of E.

The Green Deal is an initiative to help landlords and homeowners install energy efficiency measures through improvement works which are financed through a loan ‘to the property’.

Sometimes this will mean landlords making an upfront payment and sometimes not, depending on the work that is being done.

Repayments are added to the utility bills paid by the tenant – but are offset by the savings made as a result of the efficiency measures.

John Davidson, of Green Deal providers Eco-energi,  said as long the tenants are sensible about their energy use and don’t, for example, leave the lights on all day – their bills will be lower or the same as before.

“The bill will include a Green Deal loan repayment figure, but we need to dispel the perception that the tenant is covering loan repayments," he said.

“It’s not the tenant paying for the improvements it’s the savings achieved on the bills that are repaying the loan.

“The golden rule is the expected savings made from the home improvement must be the same or greater than the total cost of implementing the improvement itself.”

The amount a landlord must pay upfront depends on the work required. Some landlords may not have to pay anything, while others may have to fund some of the costs.

The amount is calculated by software that works out the amount of energy that can be saved through the efficiency measures and therefore repaid through the bill, with the shortfall paid for by the landlord.

A Green Deal Provider (GDP) arranges the finance, an assessment, appoints suitable installers, manages the project and all works are covered with an insurance backed guarantee. Improvements can only be carried out by certified PAS 2030 Green Deal Installers.

The comprehensive Green Deal assessment is £95 plus VAT however if the Green Deal plan goes ahead then this fee is reimbursed.

To determine what works can be done to meet MEES, Eco-energi offer a MEES-CAR (Compliance Advisory Report) for just £20+vat.

This involves a review of your current Energy Performance Certificate (EPC) and any recommendations it may have contained, any works that have been done to the property, and then works out what you must do now to upgrade and comply.

From here if there are significant works required then a GDAR (Green Deal Advice Report) is done outlining which measures can be installed.

Eco-energi is fully FCA authorised for both credit brokering and Green Deal finance.

For more information contact Eco-energi on 01344 876 672 or email info@eco-energi.com.

Energy efficiency measures that can be installed include: new or replacement boiler (condensing, biomass); solid wall (internal and external)/ loft/floor insulation; cavity wall insulation; heating/ hot Water/ lighting controls; heating system insulation; ground and air source heat pumps; fan assisted storage heaters; flue gas recovery devices; innovative hot water systems e.g. waste water heat recovery systems; draught proofing.

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