The Green Deal: the closed loan scheme and outstanding charges

That single design choice explains almost every question people still ask about the scheme. It is why a buyer can inherit a debt they never signed for, why a landlord is legally required to disclose it, why switching supplier is possible but conditional, and why paying the loan off early is not always straightforward. The scheme itself has gone; the charges have not.

The Green Deal: what it was and when it closed

The Green Deal was launched by the previous Coalition Government to incentivise and help fund energy efficiency and renewable energy technologies for homes⁸. It went live at the beginning of 2013⁹, and the official description of the scheme was that households could use cheap loans to spend on energy-saving improvements, such as insulation and new boilers, with no upfront cost¹⁰. Home owners, landlords and tenants could get loans for improvements such as adding insulation or solar panels².

The scheme's central promise was the golden rule: a household's energy bill would not go up overall as a result of taking out a loan, and installers were expected, in theory, to ensure the savings from the measures would equal or surpass the amount spent on them¹¹. That promise is worth reading carefully now, because it was a design intention rather than a guarantee that survives in any enforceable form.

The UK Government stopped funding the Green Deal scheme in July 2015³. The scheme is described officially as running from 2013 to 2015 and is now closed to new applicants¹. It was not the last scheme to close: the Green Homes Grant closed in March 2022¹², and the National Insulation Association's summary of the period records that both had closed, meaning householders could not then apply for support via any consumer-focused national funding scheme¹². For a household trying to place the Green Deal in context, the closed insulation schemes page sets it alongside the other retired programmes.

What the Green Deal did for energy independence was partial and conditional. It moved the upfront cost of fabric measures off the householder and onto a finance arrangement, which let some homes insulate without capital. It did not remove dependence on the grid or on a supplier: the repayment route ran through the electricity bill, so the household remained tied to a billing relationship for the life of the loan.

How the loan worked: borrowing against the electricity bill

The mechanism was simple to describe and awkward to unwind. Repayments were spread out over time and paid back through the electricity bill¹³, and the loan was repaid over a period of up to 25 years by being added to the property's energy bill⁵. The charge was added to the electricity bill specifically, not the gas bill².

That choice of collection route is the source of most of the scheme's later complications. A debt collected through an electricity account is only collectable while the account exists, so the scheme needed the charge to survive a change of occupant, a change of supplier and a change of tenancy. The design answer was to attach the obligation to the meter and the property rather than the account holder: the charge stays on the energy meter, so if the person moves, the charge stays with the house, and the next occupant picks up the payments¹⁴.

The scheme's own literature described the arrangement as one where the financial obligation is attached to the property, so there are no costs to the consumer once they stop receiving the benefits in energy reduction⁵. That is a maker-side framing of the same fact, and it is worth separating the two halves: the obligation does attach to the property, and the householder's liability does end when the benefit stream ends. What it does not mean is that a new owner escapes a charge that is still running.

For energy independence, the loan was a mixed instrument. It financed fabric improvement, which reduces the energy a home needs and therefore reduces exposure to price. It also created a standing charge on the electricity account that a household cannot shop away, only service or repay.

The charge stays with the property, not the person

This is the defining feature of the scheme and the one that catches people out. The loan is attached to a property, rather than an individual, so if a homeowner sells their home, the loan will pass to the new owner³. The same point is put independently: the loan is tied to the property rather than the individual⁵. Contemporary reporting at launch described the scheme as attached to the home, not the individuals who take it out¹⁰.

The practical consequence is that a Green Deal charge behaves more like a property defect or an easement than like a personal debt. It does not follow the borrower to a new address, and it does not disappear when the borrower dies or moves. It sits with the building until it is repaid or the term ends.

For a household's energy independence, this cuts both ways. A property with a charge has a known, fixed repayment profile built into its running costs, which is a form of cost certainty. It also has a cost that cannot be removed by changing behaviour, changing supplier or improving the building further, and that a buyer will price into an offer.

Buying or renting a home with an outstanding charge

Disclosure is a legal duty, not a courtesy. The seller or landlord is legally required to tell the buyer or tenant about the Green Deal loan, and to tell them that they are responsible for it². They must also show the buyer or tenant the Energy Performance Certificate for the property, and must do this before the buyer or tenant moves into the property². A tenant should have been told the property was part of a Green Deal before moving in¹⁵.

The Energy Performance Certificate is therefore the practical place to look, and the Energy Performance Certificates page explains what an EPC records and how the Green Deal charge appears on it. The scheme's quality mark, a green house with a tick on the roof, is a visual identifier of Green Deal work rather than proof of an outstanding loan².

Where disclosure did not happen, there is a route. The Energy Ombudsman can review disputes with Green Deal providers if they are unable or unwilling to help when something goes wrong with a Green Deal plan, and it can also take complaints where a buyer moved into a property and the seller or landlord did not tell them about the loan⁴.

Renting adds a second layer. A landlord might charge more for energy if they borrowed money to make energy efficiency improvements such as wall insulation or double glazing¹⁵. That is a permitted recovery of cost, and it sits alongside the tenant's own right to switch supplier where the tenant pays the bills¹⁶. The insulation in rented and social housing page covers the wider split of responsibilities between landlord and tenant.

Paying the loan off early, and when charges apply

Early repayment is allowed, but it is not free of consequence. You can pay the loan off early but there may be extra costs². The specific condition reported by the scheme's administrators is that early repayment charges may apply if the repayment period is more than 15 years⁶. That threshold matters: a loan taken over a long term, which the scheme permitted up to 25 years⁵, is the case most likely to carry a charge.

The process starts with the managing company rather than the supplier. A letter is issued telling the householder how to repay early and about any charges from the company that manages the loan². The first step is to contact the energy company or Green Deal provider to check what any charges are¹⁷. Any early repayment charges must have been disclosed up front or made clear in the Green Deal agreement¹⁷.

The Green Deal plan itself should record the mechanics. The agreement documentation covers what happens if the householder wants to pay the agreement off early¹⁹, and the payment period information includes the date on which the payment period starts and the date on which it finishes²⁰. Those two dates, read together with the 15-year threshold, tell a householder whether a charge is likely to bite.

That is the crux of the early repayment question. A householder who intends to stay for the full term and wants the charge off the bill has one calculation; a householder who intends to sell in two years has a different one, because the buyer inherits the charge either way and the early repayment penalty is money spent to remove a cost the seller will not bear.

Switching electricity supplier with a charge in place

Switching is possible, with one condition. You can change electricity supplier as long as the new supplier is taking part in the Green Deal scheme². The condition exists because the charge is collected through the electricity bill, so the receiving supplier has to be able to administer it.

The underlying right to switch is general. If you pay a supplier directly for the electricity or gas you use at home, you can choose to switch to a different supplier or tariff at any time¹⁶. Switching is described as easy where the household is on a variable rate tariff or where a fixed rate contract is ending shortly²¹, and it is free of charge²². Where a household is in credit with the current supplier, the money should be claimed back when switching²³.

For a household's independence, this is the sharpest limit the scheme imposes. A Green Deal charge narrows the supplier market to participating suppliers, which reduces the household's ability to chase the cheapest tariff. It does not prevent switching altogether, and it does not affect the gas account, but it is a standing constraint on the electricity side for as long as the charge runs.

Where a household is struggling with bills, suppliers can agree a payment plan, payment break or reduction²⁴, and the insulation grants in Wales page covers the current Welsh alternative, Green Homes Wales, which offers interest-free loans ranging from £1,000 to £25,000 with repayment terms up to 10 years⁷. That scheme is a separate programme with its own terms, not a revival of the Green Deal.

Complaints, and where the Ombudsman fits

The complaint route has a clear order. Contact the Green Deal provider if you have a complaint². If the complaint is not resolved within eight weeks of contacting the provider, it can go to either the Financial Ombudsman Service or the Energy Ombudsman, depending on what the complaint is about².

The split is by subject matter. The Financial Ombudsman Service handles cases where someone thinks they were mis-sold the Green Deal, for example if the provider did not make them aware of the facts, and other financial issues². The Energy Ombudsman reviews disputes with Green Deal providers if they are unable or unwilling to help when something goes wrong with a Green Deal plan⁴, and it also covers dissatisfaction with the work the installer did, and cases where a buyer moved into a property and the seller or landlord did not tell them about the loan².

The eight-week deadline is the practical trigger. The same eight-week period before referral to the Energy Ombudsman is described in the context of Green Deal complaints³. For a householder, the sequence is: check the charge with the provider, complain in writing, and escalate after eight weeks if the matter is unresolved⁶.