Under the Green Deal scheme due to commence in October this year, utility bill payers will have the opportunity to have energy saving measures installed at their property with no upfront costs, via a Green Deal finance package. In every arrangement there are three key players, the green deal advisor, the green deal provider and the green deal installer.
Although of the roles are vital for any finance package, the biggest part is played by the provider, who brings the whole thing together. In this article we will be looking at what a green deal provider actually does what his responsibilities are and how an organisation might get involved.
What Does the Green Provider Do?
The provider organises all of the elements of the green deal improvement package. It provides or arranges the finance, instructs the advisor and arranges the installation of the measures chosen by the bill payer. The contract is therefore between provider and bill payer. The provider’s responsibilities do not end once the measures are installed. It is the point of contact for the bill payer throughout the life of the plan.
A green deal provider may operate in a number of ways. It may do everything in house, providing the finance and employing the advisor and the installer. At the other extreme, it may be no more than a “figurehead”, outsourcing all of the elements to another organisation or organisations. A trusted brand might consider this approach; it will no doubt make some money in commissions as well as attracting customers to the brand to buy other products and services. A third option is for the provider to provide the finance and outsource the assessment and the installation.
The final method would be for the provider to simply be a counter signatory for the loan, allowing an organisation without a CCA licence (a requirement for the provider) to effectively run green deal plans., All of these approaches are perfectly acceptable under current proposals.
Responsibilities of the Green Deal Provider
The provider will be responsible for arranging an assessment by an accredited assessor to determine which of the measures covered by the green deal, if any, would comply with the golden rule, arranging the finance package with which the measures are purchased and arranging the installation of the measures.
The “golden rule” states that the total monthly repayments for the green deal plan should be equal or less than the savings resulting from the installation of the measures as predicted by the advisor and it is up to the provider to ensure compliance with this rule by only offering suitable measures to its customers.
After installation of the measures the provider must retain the point of contact for the bill payer, dealing with complaints and arranging compensation from installers if necessary. When the property changes hands (or when someone else becomes responsible for paying the utility bills) it must provide information on the plan to the new bill payer.
The provider must be licensed and must make provision for the plan to be taken over in the event of loss of the licence and insolvency. It must provide an independent conciliation service for handling customer complaints.
Becoming a Green Deal Provider
To become a green deal provider you must hold a valid Consumer Credit Act licence (as must any person or organisation offering personal loans). You must sign up to the Green Deal Code of Practice which is due to be published in the summer and to a contract between energy suppliers and green deal providers which governs the payment collection process. This is known as a Green Deal Arrangements Agreement.
There are fees payable for authorisation and providers will be closely monitored, especially in the early days. In practice, providers are likely to be large organisations with the financial muscle to offer finance on the large scale and an existing trusted brand name. Names like Tesco, M & S and B & Q have been touted as some of the retail giants believed to be interested in becoming Green Deal providers.
The Green Deal will rely on the Consumer Credit Act to provide safeguards for those taking out green deal loans.