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Energy Bill Offers Cash Towards Efficiency Improvements

Homeowners in England and Wales are to be offered £10,000 to cover the costs of improving energy efficiency in the home.

Announced earlier this month, the proposal aims to make energy efficiency more affordable for homeowners, many of whom cannot at present bear the cost of insulating lofts and cavity walls, converting garages or installing double glazing.

Forming part of the revised Energy Bill, the proposal is set to offer £10,000 to eligible homeowners to cover the cost of carrying out energy improvements around the home. The £10,000 is a marked increase on the previous amount offered to homeowners under the Energy Bill, which previously provided just £6,500 in funding. The scheme is also available to landlords.

Does the new Energy Bill deal provide property owners with a sufficient incentive to go green? Perhaps not. Although it is arguably the case that most homeowners would prefer an energy efficient home to one that is a little less green, the Energy Bill will not allow homeowners to reap the full benefits of efficiency changes.

The proposal is designed to supply energy improvements through Government-accredited installers. The £10,000 can cover insulation, new central heating boilers, solar panels and so on, but critically, the sum is to be repaid by homeowners through the energy savings. This means that homeowners continue to pay the full price for their energy bills (based on ever-increasing wholesale fuel costs and prior consumption), whilst the Government pockets the difference over a 20 year period.

A lot can happen in 20 years, which is why the proposal is fixed to properties and not the property owners. If figures published by the Energy Saving Trust are to be believed, simple changes such as replacing single-pane windows and installing insulation can save up to £225 on energy bills each year.

£225 over 20 years is only £4,500, so it would seem that customers are getting value for money – but will £10,000 be spent on each property? Will the rising cost of energy make the proposal worthless for homeowners? Will homeowners even want to avail of a scheme that installs various energy saving measures for free but provides none of the financial savings thereafter?

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