Energy related issues never seem far from the headlines these days: stories on rising costs, supplier profits, future energy security, alternate sources, the impact of climate change and government response all stoke consumer concerns about prices and the need to reduce consumption. The result is projects aimed at making properties more energy efficient are becoming more of a focus for both property owners and firms in the building trade.

In a bid to encourage more people to invest in energy-saving improvements, last yearthe Government launched the Green Deal. The scheme presents a solid business opportunity for many tradesmen and contractors, yet the government programme aimed at funding energy-efficiency works remains worryingly below the radar.

Recent research by Wickes revealed that 70% of tradesmen have never heard of the Green Deal, while those that have say they feel insufficiently informed. Nonetheless, the opportunity is there for independent traders and small business people to take advantage of the programme.

To date, more than 100,000 Green Deal assessments have taken place - a clear indication that it provides potential business opportunities. However, with the majority of tradesmen currently unaware of it, there is clearly work to be done - both with consumers and suppliers. The first step is to understand it.

The Green Deal unwrapped

At its most basic level, the Green Deal offers energy-saving home improvements such as boilers, insulation - and in some cases -solar panels and double-glazing through a loan scheme that allows people to borrow the money for improvements and repay it over time through their electricity bills. The loan is against the property (in fact the meter), not the individual owner, and so it stays with the property - either a house or business space - when it is sold.

The Green Deal can be seen as an added value service that tradespeople and contractors can offer customers as part of a wider package of improvements on a home or business premises - with the upshot being substantially reduced energy costs over the long term and a smaller carbon footprint.

One of the key aspects of the Green Deal is the 'Golden Rule', which statesis that, while electricity bills - with which the loan repayment is included - will go up initially, this rise is offset by an equivalent drop in gas expenditures. In theory this means Green Deal loan repayments should not exceed the energy bill savings made from the installation of the funded work in the immediate term, and lead to cost savings - as well as continued greener energy consumption - down the line.

Yet, while 100,000 houses have had a Green Deal assessment, fewer than 1,000 have completed works through the scheme - and therein lies the opportunity: some 80% of those who have had an assessment have either already started to undertake energy efficiency work or plan to in the near future, signalling a chance for those able to carry this work out to win some business.

What the works entail

To work under the terms of the Green Deal on funded projects, tradespeople and contractors first need to understand how the scheme works, and what specific  works are covered. The energy improvements that fall under the deal include:

  • Heating and controls, such as condensing boilers, district heating, storage heaters, and under-floor heating.
  • Insulation products, including cavity wall insulation, draught proofing, floor, roof, loft and solid wall insulation, and heating system insulation (pipes and cylinders).
  • Microgeneration, such as biomass boilers and room heaters, ground, water and air source heat pumps, micro-CHP, micro-wind, solar PV, and solar thermal.
  • Others include chillers, energy efficient glazing and doors, heating ventilation and air conditioning controls, solar blinds, shutters and shading devices.

Qualifying for a Green Deal loan requires an inspection by an assessor accredited with the Green Deal Quality Mark, who evaluates the household's or business's energy usage, calculating energy efficiency to produce an Energy Performance Certificate, and examining the occupants' energy use and day-to-day habits. 

The Green Deal provider, which can be an energy company - such as Travis Perkins partner Toriga - or a contractor, then uses the assessment to create a plan outlining the necessary work to reduce the property's carbon output, along with payment amounts and a schedule.Finally, the recommended improvements are carried out by an authorised Green Deal installer, with Green Deal provider financing the loan.

Reaping the benefits

The opportunities for new businesses lie largely in becoming a Green Deal assessor or installer. Any organisation or individual can become a Green Deal assessor or installer, providing they meet the requirements.

Assessors must meet National Occupational Standards requirements, successfully completing the relevant training and exams, registering for the Green Deal Quality Mark, and committing to the code of practice. Existing domestic energy assessors can add the skills necessary to become an accredited Domestic Green Deal Assessor through a two-day training programme, while those new to the energy industry must take an intensive five- day course.

Becoming a Green Deal installer on the other hand requires registering with a Green Deal provider, and undertaking training to cover what the installer wishes to supply, as well as courses enabling the operation of a Quality Management system in line with PAS2030. Access to these training courses is available from a number of energy companies.

A winning scenario

Clearly with energy price hikes a continuing worry along with concerns about the climate change and energy security feeding consumer concerns, it makes sense for homeowners - and business owners - to take every measure possible to reduce their energy output. And with over 100,000 green deal assessments already completed, it is evident that many people are serious about doing so. This in itself provides a potentially lucrative source of business opportunities for those firms able to help - but if companies do even more to promote within the trade and to their customers, the potential for an even better Green deal-based pipeline of projects is much greater.

What's more, by putting this work into a regulated- and fairly funded - environment, with accredited companies, the Green Deal is helping the industry to deliver energy and cost savings through a scheme that consumers can both trust and afford. It is a situation with benefits for all: the opportunity to make significant improvements to the UK's stock of housing and other properties, while providing a new and welcome revenue stream for the industry's tradesmen and contractors.