Deputy Prime Minister Nick Clegg has announced that £540 million of the government's home energy-efficiency programme will be targeted specifically to help the poorest people in society.
In a speech to leading environment and industry figures in London last week, Clegg pledged that the Green Deal would support the poorest and most vulnerable in society, including people in deprived areas, from rising energy bills by upgrading their homes so that they are cheaper to heat for good.
The Green Deal is the government’s plan to upgrade the nation’s hardest-to-heat homes at no upfront cost. Where the cost of the work outweighs the savings, or people need extra financial help, energy companies will be able to step in to top up the loan under the Energy Company Obligation.
“We will be requiring the energy companies to provide an estimated £1.3 billion a year of support for energy efficiency in our homes, with at least £540 million to fund energy-saving improvements in the worst off homes.
“It is shameful that the UK still has so many families unable to heat their homes. By delivering lasting improvements, each year this money will help 180,000 of the poorest households make their homes cheaper to heat for good.”
Alongside discounts on energy bills, the Winter Fuel Payment and financial support if it gets really cold, the Energy Company Obligation (ECO) will be available to help the fuel poor heat their homes to a healthy level more affordably by installing insulation or new boilers. The recently published Hills Review found targeted energy-efficiency policies are the key to effectively tackling fuel poverty.
The ECO will now target support, worth an estimated £540 million every year, to fund energy-saving improvements in the worst-off households.
According to the Department for Energy & Climate Change (DECC), this figure will include around £350 million a year to deliver heating and insulation measures to an estimated 270,000 low income and vulnerable households by 2015. This, Clegg said, will focus assistance where fuel poverty rates are highest, and ensure help is available for those most in need.
In light of responses to the recent public consultation on the Green Deal, DECC said it was now considering ways to provide 'more targeted support' for the lowest income homes. This could mean that for those living in the poorest areas, including in social housing, specific support worth around £190 million a year will be available from the energy companies to upgrade homes and flats with loft and cavity wall insulation, as well as other insulation measures, to make them warmer and cheaper to run.
DECC has also said it will increase the eligibility criteria for the Affordable Warmth element of the ECO, for example to include low-income households on working tax credit, so that more fuel poor families can be helped.
While it confirmed that a large proportion of the ECO will still be targeted at solid wall insulation, support will also be opened up for more measures than before – including hard to treat cavity walls. Where solid wall or hard to treat cavity insulation is being installed, this can be accompanied by other measures to reduce heat loss from a property, such as glazing and draught proofing.
Energy companies will be allowed to carry forward overachievement against their targets under the current Carbon Emissions Reduction Target (CERT) and Community Energy Saving Programme (CESP) and count it towards their ECO targets.
DECC said these changes would 'help smooth the transition for the insulation industry between current schemes and the Green Deal'.