Lofty Rhetoric, Scant Details in UK Green Deals for Small Biz

Lofty Rhetoric, Scant Details in UK Green Deals for Small Biz

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The U.K. government's Green Deal loan scheme will emerge as a "transformational" force for small- and medium-sized businesses, according to Climate Minister Greg Barker, providing ready access to the upfront capital needed to enhance the energy efficiency of their properties.

Speaking as the Energy Bill that underpins the Green Deal today receives its latest committee stage reading, Barker said that the new loan scheme could benefit up to two million businesses.

"It will be transformational for small business and mixed use commercial buildings," he told BusinessGreen.

To date much of the government's messaging to promote the Green Deal has focused on the way it will provide households with loans to cover the upfront cost of energy efficiency improvements that will then be repaid through energy bills.

However, Barker said that further details will be announced during the second reading of the bill in the autumn detailing how businesses can take advantage of the scheme to fund a wide range of property improvements.

"For the first time, we will be able to break the Gordian Knot where commercial landlords have not had an incentive to invest in energy efficiency measures that will only benefit their tenant," he said, explaining how the Green Deal will ensure that the cost of improvements will be covered by the energy bill payer.

Barker also predicted that many of the energy efficient technologies available to commercial properties could qualify for the Green Deal.

"There are different technologies that can work well with businesses, like lighting and air conditioning that work effectively in buildings where there is a relatively high use of energy," he said.

For domestic properties the government expects the average property to receive no more than £10,000 through the Green Deal, although Barker admitted that higher sums would be available for households that could satisfy stringent criteria confirming that more costly measures will still deliver sufficient energy savings to justify the loan.

However, a spokeswoman for the Department of Energy and Climate Change confirmed that the government has "no plans to cap the amount of investment per building" under the Green Deal, requiring only that properties comply with the "golden rule," which ensures that energy bill savings exceed the cost of monthly loan repayments.

This "golden rule" is likely to make a large number of energy efficient technologies eligible for the scheme, given that measures deployed in commercial properties and offices, such as efficient lighting systems and improved boilers or air conditioning systems, have been consistently shown to deliver a return on initial investment within three to six years.

This article originally appeared at BusinessGreen.com and is reprinted with permission.

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