Out-Law News 1 min. read

Energy efficiency scheme will begin in a year as Energy Act comes into force

The Energy Act  has become law, putting in place a Government-backed scheme that will  enable new energy efficiency measures in both domestic and commercial properties to be undertaken at no up-front cost. Costs will be paid over time through energy bills.

The Green Deal is designed to increase the uptake of energy efficiency measures in properties by allowing property owners to defer the up front costs of such works. The scheme is part of Government plans to reduce emissions from buildings.

Repayments will be at a level no higher than the energy savings made through the installation of energy saving  measures, according to the Government .

"The coalition is doing all it can to bear down on energy prices, but insulation will provide the long term help to manage bills," said Energy and Climate Change Secretary Chris Huhne. "The Green Deal will be as easy as ABC by making work affordable, providing bespoke independent advice and choice in the market from well-known and trusted high street names.”

Under the scheme an independent assessment is made of the property's needs, and the  property owner can then choose any supplier accredited under the Green Deal scheme to carry out the work.

"The success of the Green Deal, when looked at in combination with existing microgeneration initiatives such as Feed-in Tariffs and the Renewable Heat Incentive, and their effectiveness to reduce emissions will, no doubt, be explored further once all of the initiatives are fully operational," said energy law expert Linda Fletcher of Pinsent Masons, the law firm behind Out-Law.com. "Business is already looking at if and how the Green Deal can assist in reducing the cost of occupation."

The new Act (110-page / 353KB PDF) also contains measures to  encourage energy companies to reduce carbon emissions and will prevent  landlords from renting business premises which have a lower energy performance certificate  rating than an 'E' rating after 2018.

New provisions set out in the Act relate to the Government's plans to increase the  use of smart meters and new measures designed to  bolster the security of the UK's energy supply.

The Act creates a new 'Energy Company Obligation' that will replace the existing obligation on energy suppliers to reduce carbon emissions under the 'Carbon Emissions Reduction Target', which expires at the end of 2012.

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