The commission regulates state aid and competition across the EU’s 27 member states and has given the thumbs up to a potential £600m of public support to be provided to the energy efficiency scheme via the Green Investment Bank.
Permission was granted as the commission concluded that the positive effects of the scheme would outweigh any potential distortions to the market brought about by state financial support.
Commission vice president, Joaquín Almunia, said: “The UK Green Deal allows consumers and businesses to improve the energy efficiency of their buildings without making huge upfront investments.
“This is another example of how our policy of state aid control can support private investment in energy saving and enhance competition at the same time.”
The ruling, however, does not impact the continuing dispute between the UK and Brussels over the reduced rate of VAT provided to energy-saving products.