Energy efficiency specialist Enact Energy believes that private landlords throughout the United Kingdom could be among the biggest beneficiaries of next year’s Green Deal.
Enact Energy was named earlier this year as one of the Green Deal pioneers by the Department of Energy and Climate Change and the company will be one of the first with the power to offer landlords home improvement projects sponsored by the Green Deal Plan or grant funding through ECO (Energy Company Obligation). They firmly believe that landlords will be able to use the Green Deal to make significant energy efficiency improvements with little or no upfront costs to themselves. The tenants would then pay off the loan costs through their bills. The most common of the 40 types of energy efficient upgrade work is expected to be insulation, heating upgrades, renewable energy products such as solar panels, and double-glazing.
Enact dismissed concerns raised by the RLA (Residential Landlords Association) that the Green Deal will lead to tenant resistance because they will resent having to pay off a landlord’s loan via higher energy bills. Enact feel that that their opinion does not take into account the Green Deal’s Golden Rule, which should be clearly communicated to every tenant in the UK. The Golden Rule is that work carried out as part of the Green Deal must not cost more than the expected financial savings. Tenants should be helped to understand that even though they are paying for the improvements; their bills will still be less than they would have been before. However, some work such as double-glazing is expensive to have installed relative to the energy savings it delivers. In these cases, the landlord will have to pay an upfront payment towards the cost of the work on their property. However, landlords should always inform their landlord insurance providers when undertaking projects such as installing solar panels or changing the layout of a building.
Enact Chairman, Adrian Wright, said “Landlords will need the permission of the tenant to apply the loan to a property, so works will only be able to go ahead if they agree – a communication challenge that landlords must rise to if they are to see their properties benefit from the Green Deal. Alternatively, works can be installed during tenant void periods negating the tenant permission obstacle. Whilst it is the tenant who pays the loan, it is also the tenant who will benefit from the energy savings so through the Golden Rule they should be no worse off and will benefit from a warmer home with lower energy bills.”