Tuesday 2 March 2010

The Pay As You Save - Eco Loans


Government plans for "green loans" to help home owners make their homes more energy efficient by installing technology such as insulation and solar panels were announced by the Energy and Climate Change Secretary Ed Miliband.

The Warm Homes, Greener Homes scheme will see the loans tied to the house where the eco-measures are applied, so they can be repaid over a long enough period that the savings on energy costs outweigh the payback instalments.

The "Pay As You Save" (catchy?!) programme aims to ease people past the financial barriers - such as high upfront costs - faced by people trying to make their homes energy efficient and more greener.

It forms a key part of the government's strategy to cut greenhouse gas emissions from housing by 29% by 2020. With around a quarter of UK emissions originating from energy used in homes, this is a crucial target. The Government says, that the scheme will also reduce energy bills for householders and boost jobs.

Some 65,000 jobs could be supported by the green homes industry by 2020, ranging from skilled installation and manufacturing of technology including small scale renewables, to providing advice on home and business energy strategies. In the short term, householders should see reduced energy bills. Installation measures such as solid wall insulation, may net energy cost savings in the region of £380 a year!


The strategy will be implemented in three stages:
  • To insulate 6 million homes by the end of 2011
  • To have insulated all practical lofts and cavity walls by 2015
  • To have offered up to 7 million eco-upgrades by 2020
A campaign promoting the use of Energy Performance Certificates, will encourage home owners to add value to their homes, by installing energy efficient adjustments and improvements. Home-owners will even be able to undertake a "virtual green makeover" on their properties online before committing.

To promote the scheme at the local level, an additional £2.5 million will go to establishing a network of lived-in green show homes across the UK, to demonstrate to people what a refurbished home is like, and what technologies are available to improve houses.

Ed Miliband said: "The Warm Homes, Greener Homes strategy will remove the deterrent of upfront costs and reduce the hassle of moving 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."

"New 'pay as you save' green finance, a new alliance between energy companies and local authorities to help people in their communities, as well as moves to encourage landlords to stop ignoring energy wastage in their properties, will help deliver the radical transformation that's necessary."


A cynical observer might view this initiative as simply more electioneering, in the run up to the general election. Another dampener on proceedings is the context in which this announcement is made; the UK economy is in a dire state, and thus the task of persuading home owners to take out yet more debt is an incredibly difficult prospect.


Useful Links:

Department of Energy and Climate Change (Docs: 1 | 2 )

The Guardian - Are we really going to let ourselves be duped into this solar panel rip-off?
The Independent - Government plans 'green loans' to make homes more efficient

1 comment:

  1. Useful links. All this talk of future prospects seems a little bullish given the wider economic climate.

    ReplyDelete