Background

The much anticipated Green Deal will revolutionise the way that the nation’s homes and businesses are made more sustainable.

The current Energy Bill is setting out the detail but put simply, it is a mechanism whereby householders and businesses can get energy efficiency measures without paying for them upfront. Instead, Green Deal providers will put up the finance and the cost will be recovered via the energy bills. There is a ‘golden rule’ that the savings on the energy bill must be the same as, or greater than, the cost of the work.

There will also be extra help for those on low incomes and those in hard to treat properties. The new Energy Company Obligation (ECO) will work alongside the Green Deal to provide additional support to vulnerable households so that the golden rule is met.

What is the proposal?

In a nutshell, it is proposed that a consortium of Local Authorities comes together to form a dedicated social enterprise in the form of a Community Interest Company (CIC) to provide a Green Deal offer at the regional level.

The underlying rationale is that Local Authorities don’t simply want to be observers in the process but actively want to be major players and ensure that their householders are able to take advantage of a credible and trusted Green Deal offer. Additionally the prospects of linking up the deployment of energy measures with economic development and training and employment opportunities, together with all of the social and health benefits, resonates strongly with many Local Authority priorities.

Furthermore, Local Authorities themselves could see Green Deal as a financing opportunity. By making funds available for a CIC to administer, the Local Authority could achieve the double dividend of both achieving a return for its invested money as well as ensuring that householders can access competitive, trusted and reliable finance.

As well as Green Deal the Energy Bill is creating the Energy Company Obligation (ECO) which will put a requirement on energy suppliers to provide additional financial support to support measures  for low income and vulnerable householders. This will be a regulatory regime rather like the current ‘Priority Group’ and CESP requirements under CERT.  The CIC will be in a strong position to act as a conduit for ECO funding to ensure that such households can access the full benefit of Green Deal.

USEA together with Local Authority partners has for several years established links with energy suppliers and the suggestion is that models such as this CIC would present practical partnering opportunities for attracting and deploying ECO funds.

Finally, explicit with the business model is that the CIC would aim to make a surplus that will be put into a Community Fund. This fund could be used to support projects that will help tackle climate change and fuel poverty that Green Deal and ECO may not be able to help.