The Green Deal is a government initiative to help consumers and businesses make their properties/buildings more energy efficient (to help meet carbon reduction targets committed to in the Climate Change Act 2008). The improvements/measures are to be paid for by a long-term finance agreement attached to the property’s energy bills. This loan stays with the property should the owner move. To qualify for finance and hence ‘The Green Deal’ the improvements must meet the ‘Golden Rule’.
Simply put, the Golden Rule means the owner of the property never pays back more than they save on their energy bills each month. However this doesn’t guarantee savings as it is an estimate based on assumptions. Some people may only ‘break-even’. The aim of the Golden Rule is to keep the energy bills lower than or equal to what they were prior to the measures being installed.
The Golden Rule is the principle which limits the amount of finance a provider can offer customers installing energy efficiency improvements to their property under the Green Deal Plan.