funding

In order to meet the UK target of an 80% reduction in carbon emissions by 2050 compared with 1990 levels, it is estimated that between 400,000 and 1.8 million homes will need to be upgraded with energy efficiency measures every year, and there is a range of financial support in the form of grants and interest-free loans available from the Government, local authorities and energy companies for installing external wall insulation (EWI).

The key funding schemes are outlined below but criteria and eligibility vary according to area and sector, and detailed information should be obtained from the relevant scheme or via the Energy Saving Trust.

Funding Schemes

Arbed

Arbed, the Strategic Energy Performance Investment Programme led by the Welsh Government, is focused on improving the energy efficiency of homes in Wales. Community-based rather than for individual homes, Arbed is available to housing associations within Strategic Regeneration Areas (SRAs) in Wales for retro-fitting properties with external and internal wall insulation, draught proofing, heating systems and renewable energy measures. £30 million was invested into Phase One in 2010/11 with Phase Two due to come into effect in autumn 2011.

Welsh Government

Carbon Emissions Reduction Target (CERT)

The Carbon Emissions Reduction Target (CERT) is an obligation on energy companies to reduce carbon emissions from homes by providing grants and offers to consumers to install energy efficiency measures and renewable energy technologies. Funding is provided by the six major energy suppliers, British Gas, EDF, E.ON, npower, Scottish Power and Scottish & Southern Energy, and consumers can take up grants and offers from any energy company regardless of whether they supply their gas and electricity. CERT will run until December 2012 when it will be replaced by the Energy Company Obligation (ECO).

Department of Energy and Climate Change (DECC)

Community Energy Saving Programme (CESP)

The Community Energy Saving Programme (CESP) is an obligation on gas and electricity generators to support energy saving measures for consumers in 4,500 low income areas of Great Britain. It is delivered through community-based partnerships between local authorities, community groups and energy companies via a house-by-house, street-by-street approach. CESP will run until December 2012 when it will be replaced by the Energy Company Obligation (ECO).

Department of Energy and Climate Change (DECC)

Energy Company Obligation (ECO)

The new Energy Company Obligation (ECO) will come into force in December 2012 as part of the Green Deal. Replacing CERT and CESP, it will place a legal obligation on energy companies to reduce carbon emissions and tackle fuel poverty by supporting energy efficiency improvements to homes. ECO will be focused on the low income and most vulnerable households with the objective of creating warmer homes rather than reducing energy bills. It will also subsidise harder to treat properties that require the next most cost effective measures, such as EWI, which do not meet the Green Deal’s Golden Rule.

Department of Energy and Climate Change (DECC)

Green Deal

The Green Deal is the Government’s new flagship scheme due to be introduced in autumn 2012 which will allow consumers to install energy efficiency measures at no upfront cost and repay them over time from the resulting savings on energy bills. At the heart of the Green Deal is the ‘Golden Rule’ which provides that the expected financial saving must equal or exceed the cost of the work and the length of the repayment period should not exceed the lifetime of the product. It is not a conventional personal loan as it will be attached to the meter and repaid through fuel bills with a new occupant taking over if the consumer that installed the measures moves out of the property.

Department of Energy and Climate Change (DECC)

Landlords Energy Saving Allowance (LESA)

The Landlords Energy Saving Allowance (LESA) is an annual tax allowance for landlords that make energy saving improvements to their properties. It can be used for each residential property rented out by a landlord, who can claim up to £1,500 against tax every year for the costs of installing EWI and a number of other measures. LESA is available until 1 April 2015.

DirectGov

Warm Front

The Warm Front scheme provides heating and insulation improvements up to a value of £3,500 for households on certain income-related benefits living in properties that are poorly insulated or that do not have a working central heating system. To be eligible for Warm Front, consumers must own their own home or rent from a private landlord and, if the cost of the work is more than the grant available, they will have to make a contribution to enable the work to go ahead.

The Warm Front scheme is only available in England but there are other similar schemes operating in the rest of the UK:

DirectGov