Policy News

Tuesday 02 March 2010

Ed Miliband has launched the Warm Homes, Greener Homes Strategy aimed at reducing emissions from UK homes

Householders are to be loaned money to help them install renewable energy technologies and make their homes more energy efficient under a new strategy launched today (March 2).

The strategy, entitled Warm Homes, Greener Homes, is a government bid to cut emissions from UK homes by 29% by 2050 - with around one quarter of UK emissions currently coming from energy used in homes.

Energy and climate change secretary Ed Miliband, communities secretary John Denham and housing minister John Healey, launched the strategy, which aims to help people make smarter use of energy and to install technologies, such as solar panels and district heating systems, which could reduce energy bills.

Included in the scheme is a "pay as you save" green finance initiative, where private companies will provide loans to householders to cover the upfront costs of retrofitting their houses, and a new alliance between energy companies and local authorities.

Under pay as you save, loans will be linked to homes as opposed to householders, to make it financially viable when people move -as they will not have to take the loan with them.

Mr Miliband claimed the pay back of the loans would be less than the savings on energy bills by having renewable and energy efficient measures in homes.

In response to concerns over whether banks or other private investors would be able to invest in these measures in light of the financial crisis, Mr Miliband claimed many companies have already shown an interest and he added that the government was hoping not to have to underwrite the loans.

The government also hopes that the new incentives for renewable energy, including the Renewable Heat Incentive and Feed-in Tariffs, will make it more attractive for people to install technologies such as solar panels in their homes.

Obligation

Energy suppliers will also have a new obligation from 2013, which will require them to help householders save energy and to invest in energy saving, including loft and cavity wall insulation and eco-upgrades. The government expects this mechanism to deliver around two thirds of the finance required.

A new alliance between energy companies and local authorities will also come into play from 2013, where energy companies must consult with local authorities on partnerships to deliver against this obligation.

Communities secretary John Denham claimed that having local authorities to help coordinate and organise the upgrading of homes in their communities would be a big help, by taking the onus off householders to organise large scale take up of the scheme.

Jobs

DECC claims the new strategy will lead to the creation of 65,000 jobs in the green homes industry.

Launching the scheme, Ed Miliband, energy and climate change secretary, said: "This shows we can meet the national interest of tackling climate change and reducing our dependence on foreign energy at the same time as we help people save money.

"The Warm Homes, Greener Homes Strategy will remove the deterrent of upfront costs and reduce the hassle of the move to greener living. Making homes more energy efficient will help protect people from upward pressure on bills, tackle climate change, and make us less reliant on imported energy."

Also at the launch, communities secretary, John Denham, said: "Local authorities are uniquely positioned to drive and shape a low carbon economy, low carbon living and influence the kind of behaviour change that will be needed to meet the UK commitment to the 34% cut in emissions on 1990 levels by 2020.

"Councils are already making huge advances on this agenda. We want all local authorities to take the lead on reducing emissions in their area. There are obvious benefits for local people both financially and in terms of quality of life and it is crucial that local authorities maximise these and involve local people every step of the way."

Renewables

Responding to today's announcement, Scott McLean, marketing director of renewable energy service provider Ownergy, welcomed the scheme, claiming it would help make the Renewable Heat Incentive and Feed-in Tariffs a success.

He said: "At Ownergy we are working with financing companies to be able to offer financing packages for renewable energy systems. As such, we welcome the government's initiative as we recognise that financing is one of the big hurdles that must be overcome to make the Feed-In Tariffs and Renewable Heat Incentive a runaway success."

Also responding to the strategy, Joel Hagan, chief executive of utility market research company Onzo, said: "We welcome the government's ambition to change fundamentally the way that people use energy in their homes.

"We hope that the roll-out of the government's plans is accompanied by an increased commitment to making available to consumers a wider range of information through a greater number of channels to engage them and help them reduce energy consumption, saving on their bills and reducing carbon emissions."

Liberal Democrats

Not so impressed with the scheme was Liberal Democrat shadow energy and climate change secretary Simon Hughes, who said it was "staggering" that it had taken the government nearly 13 years to come up with plans to green our homes and cut people's fuels bills.

He said: "Refurbishing our homes should be a win-win situation, but Labour has bungled this kind of thing before. Today's announcement will leave millions of families without the warm homes they need for up to 20 years. We urgently need a nationwide scheme to make every home a warm home."