19/10/2017

Reforming the Green Deal Framework (UK)

The ‘pay as you save’ (PAYS) mechanism that ensures repayment of loans issued through the Green Deal programme do not exceed savings on energy bills could be reformed to contribute to future Clean Growth Strategy initiatives encouraging consumers to invest in energy efficiency improvements.

Green Deal was launched in 2013 to enable consumers to take out loans to pay for energy improvements in their properties. Through the PAYS mechanism, the loans were repaid out of the savings recorded on consumers’ energy bills, with a provision known as the ‘Golden Rule’ ensuring that repayments did not exceed savings.

While uptake was below expectations and the government ceased to invest in the scheme in 2015, the contractual, legislative and commercial arrangements that comprise the Greed Deal framework have remained in place to service existing loans.

‘Call for evidence on the reform of the Green Deal Framework’ seeks views on the options for reforming the Green Deal framework, in particular in the light of

  • the scope for simplification
  • changes in the wider industry and the policy context
  • technological developments

Additionally, the Green Deal Finance Company created to finance the loans has been purchased by new owners who are offering new Green Deal plans and other private finance providers have also expressed interest in PAYS.

 

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