The Government’s flagship Green Deal policy gets going later this year enabling participating businesses to set up as Green Deal Providers and offer consumers the finance to carry out energy efficiency retrofit work on their property, but what are the legal implications?
The Government expects the Green Deal scheme to kick start £14bn investment over the next decade and support at least 65,000 new insulation and construction jobs by 2015. Therefore, it provides one of the biggest opportunities to win jobs over the coming years. The work will be available through major contractors’ supply chains and through public sector contracts as well as directly with the property owner and it is expected that SMEs will get a fair chance to bid for contracts.
The Government intends that the Green Deal UK will revolutionise the energy efficiency of British properties. It is establishing a framework to enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no upfront cost, and recoup payments through a charge in instalments on the energy bill.
Client and main contractors are looking for companies across the supply chain who are equipped with the skills they need to comply with new standards and targets. If your company falls in to that category, what should you consider before signing that contract?
“The major strategic decision for construction companies is whether they wish to become a Green Deal Provider on the one hand or whether they wish to provide construction services to a Green Deal Provider,” said Colin Hall, partner and Head of Construction at law firm, Winckworth Sherwood.
“If it is the latter, then their responsibilities will be set out in the Construction Contract that they make with the Green Deal Provider. These will be a standard form of contract adapted to meet the job, in the usual way. This is likely to be a very viable decision to take if the Green Deal takes off because Providers will be looking for arrangements with construction companies.
“If a construction company wishes to become a Green Deal Provider then one essential element of that service is to provide up-front money for the installation. Therefore construction companies will wish to team up with finance companies. Those companies will be able to deal with regulatory compliance; and a construction company’s contract with the financier will specify the responsibilities of each party to the other.
“A Green Deal Provider is also required to provide an assessment of the property to be treated. Construction companies may wish to take on staff that are qualified to carry out this activity but they will not be required to. They will also be able to team up with external assessors who will agree to take responsibility for that part of the Green Deal.
“For many construction companies wishing to be involved in the Green Deal, being part of a consortium, is likely to be the best bet because it will allow them to contribute what they do best. The Government’s latest consultation encourages this approach.”
