Buildings Green Deal housing scheme

Published on February 27th, 2013 | by Chris Milton


“Crazy” Legal Action Threatens Green Deal Scheme

February 27th, 2013 by  

The UK’s groundbreaking £600 million Green Deal scheme is under threat after the European Union confirmed it would mount a legal action against it.

However, the decision to challenge the Green Deal scheme in the courts has been branded as “crazy,” with politicians and business leaders from across the EU condemning the decision.

Green Deal housing schemeAt the heart of the dispute is the UK’s long-standing commitment to charging a reduced rate of sales tax on energy-efficient materials used in the construction industry. Most items in the UK attract a sales tax rate of 20%, but the Green Deal, unveiled in October 2012, said that a reduced rate of 5% would be chargeable for energy-efficient building materials.

However, the EU says that this is against its rules, which allow a reduced rate of sales tax for social schemes but not for environmental ones. It also claims that a 75% reduction in the sales tax charged is not the best way to promote the use of energy-efficient goods.

The Green Deal scheme was brought into effect by the Energy Act 2011. This allows landlords and homeowners to make environmentally friendly modifications to their properties without paying upfront costs.

Instead, Greed Deal providers, including traditional finance companies, would meet the initial cost and the landlord or homeowner would repay the debt through savings on their electricity bills.

Several energy efficiency schemes, such as micro generation, already attract a 5% sales tax in the UK. One of the reasons for expanding the scheme to general energy-efficient building materials was to ensure the repayments to Green Deal providers would remain below the savings made.

The EU has long accepted homemade renewable energy in Britain as a social benefit, which is expected to be a key part of the UK’s defence against the legal action, as is the observation that other countries (including France) also have a reduced 5% sales tax on green building renovation.

Image Credit: My neighbourhood (some rights reserved) 
Get CleanTechnica’s 1st (completely free) electric car report → “Electric Cars: What Early Adopters & First Followers Want.”
Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.


Tags: , , , , , , , , , ,

About the Author

is a seasoned sustainability journalist focusing on business, finance and clean technology. His writing's been carried by a number of highly respected publishers, including The Guardian, The Washington Post and Scientific American. You can follow him on twitter as @britesprite, where he's one of Mashable's top green tweeters and Fast Company's CSR thought leaders. Alternatively you can follow him to the shops... but that would be boring.

  • From whence springs this plague of petty rule-making bureaucrats who think that their life purpose is to tell others what they cannot and can do, when people individually have freedoms that are being trampled at a furious rate? The story above is a classic example of lose-lose. More people lose their freedom to be individuals and more people make more rules from the comfort of chairs in swank offices, instead of helping fellow humans by planting yam gardens in the highlands of starving New Guinea or doing similar, practical humanitarian acts.
    I’m retired now, but when my children were pre-school in particular, I was often away for weeks at a time doing humanitarian acts. Such separations were hard, though they might seem short.
    I have a relation aged 74 who travels the world, largely at his expense, teaching teachers in remote places how to better educate children at their schools. Some parents have walked for several days to bring their children to his classes, which are under non-Government, non-religious, non-political endorsement and assistance-in-kind.
    It is hard to find good feelings for the office-bound pettyfoggers.

  • sean

    social action – reduces energy closed

Back to Top ↑
  • Advertisements

  • Top Posts & Pages

  • Cool Cleantech Events

    Low Voltage Electrification Event, April 25-27. Detroit, Michigan (US)
    Delve deep into the benefits and challenges associated with EV power supply.

    Offshore Wind Market Development USA, May 11-12, Boston, Massachusetts (US)
    Network and establish your business in one of North America’s largest energy industries.

    Energy Storage USA, June 15-16, San Diego, California (US)
    Only event in the United States focused exclusively on the commercialization of storage.

    More details are on: Cleantech Events.

  • Advertisement

  • CleanTechnica Electric Car Report

    Electric Cars Early Adopters First Followers
  • Tesla Model 3 Review by EVANNEX

    Tesla Model 3 Review from EVANNEX
  • Tesla Model 3 Exclusive Video

    Tesla Model 3 Video
  • Tesla Model 3 Exclusive Pictures

    Tesla Model 3 Video
  • Tesla Model X Review #1 (Video)

    Tesla Model X Review from new owners Zach Shahan
  • Tesla Model X Review #2 (Pictures)

    Tesla Model X Review from Kyle Field
  • Tesla Model S Long-Term Review

    Tesla Model S Long Term Review from Kyle Field
  • Nissan LEAF Long-Term Review

    Nissan LEAF Long Term Review from Cynthia Shahan
  • Interview with Michael Liebreich

    Interview with Michael Liebreich
  • Interview with Akon (Teslas & Solar)

    Interview with Akon Tesla Model S Tesla Model X Solar Power Africa
  • Interview with Dr Nawal Al-Hosany

    Interview with Dr Nawal Al-Hosany
  • Interview with Gro Brundtland

    Gro Brundtland
  • Interview with President of Iceland

    President of Iceland Ólafur Ragnar Grímsson
  • Interview with Nick Sampson

    Faraday Future VP Nick Sampson
  • Interview with Dipal Barua

    Dipal Barua 1st ZFEP WInner
  • Interview with Jonathon Porritt

    Jonathon Porritt
  • Interview with Clint Wilder

    Interview with Clint Wilder
  • Interviews with Solar Impulse Pilots

    Bertrand Piccard Andre Borschberg
  • Check out more CleanTechnica Videos.

  • Join The Solar Revolution!

    Edison-solar-energy solar-energy-spill-nice-day
  • Cost of Solar Panels

  • Search the IM Network