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Government to delay 'complex' non-domestic Green Deal as a result of industry concerns

The introduction of the Government's flagship energy efficiency programme for non-domestic buildings is to be delayed from its original October launch, according to press reports.20 Apr 2012

Industry publication GreenWise said that the Government was looking at a "phased" introduction to its Green Deal programme to ensure that it "got it right" following industry concerns that certain aspects of the non-domestic market, including proposed charges and the consent regime for energy efficiency improvements, have not yet been addressed.

The Green Deal is a Government-backed scheme which will allow property owners to fund the installation of energy efficiency measures such as double glazing or insulation at no up-front cost, with the repayments met through subsequent energy bills. It will be introduced to householders from October this year.

A spokesperson for the Department for Energy and Climate Change (DECC) told Out-Law.com that it was "likely" the non-domestic scheme would not be launched at the same time as the domestic programme.

"It is such a complex area and we need to get it right," she said. "We are discussing how best to do this with industry, who are telling us they support our decision to have a managed introduction of the Green Deal to ensure its success from day one."

She added that it was "probable" that many small businesses would be able to take part in the domestic scheme, such as those already based in domestic properties.

The Government has been criticised in the past for introducing energy efficiency related programmes and subsidies before the costs of the schemes have been fully considered. The High Court said earlier this year that cuts of more than 50% to the subsidies available under its feed-in tariff (FiT) scheme which provides incentives to for the generation of energy through solar photovoltaic (PV) panels could only apply to installations from March due to insufficient consultation.

Those cuts, described as "sudden and unexpected" by environmental law expert Linda Fletcher of Pinsent Masons, the law firm behind Out-Law.com, were intended to deal with the "huge strain" the programme had placed on DECC's budget due to the falling costs of the technology.

The Government is currently consulting on the introduction of a cost control mechanism for its Renewable Heat Incentive (RHI), which would allow it to suspend the scheme until the beginning of the next financial year once spending approaches its budget. DECC said that the proposed policy will enable it to "maintain budgetary control" as a result of lessons it had learned from the FITs scheme.

Industry body the Property and Energy Professionals Association (PEPA) has previously urged the Government to consider a staged introduction of the Green Deal. Its chairman, Stephen O'Hara, said in January that it was clear from the Government's consultation process that there were "a number of unanswered questions" relating to non-domestic properties.

"We feel that more time needs to be spent to address these concerns and to make any necessary revisions," he said. "However, rather than delay the whole introduction unnecessarily, we are urging the Government to go ahead with the framework for domestic buildings as planned. This approach will allow homeowners to begin benefiting from the new framework as soon as possible, while allowing the Government more time to ensure that plans for non-domestic homes are robust before they are introduced."

Earlier this week it emerged that Prime Minister David Cameron was planning to block moves to make energy efficiency a mandatory requirement for homes undergoing improvement work. Proposed changes to the Building Regulations in England, currently subject to a consultation by the Department for Communities and Local Government (DCLG), would have required homeowners to carry out additional energy efficiency improvements as part of other specified projects, for example extensions, where Green Deal finance was available as an option to meet the up-front costs. However Government sources told the Guardian that the so-called 'conservatory tax' would not be "fair to ordinary people trying to improve their homes".

The DCLG consultation closes on 27 April.

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