New funding initiative aims to open door to advanced green measures in the home

Energy Saving Trust to manage new £4m green finance pilots

The Energy Saving Trust has been appointed to manage the Government’s Home Energy Pay as You Save Pilot, aiming to encourage take-up by homeowners of more advanced energy saving measures such as solid wall insulation and micro-generation through use of specifically-designed finance options.

Homes account for over a quarter of the UK’s greenhouse gas emissions. If the country is to meet its long term target of reducing carbon emissions by 80% by 2050, the existing housing stock represents a quarter of the solution. ‘Basic’ energy efficiency measures such as loft insulation, low energy lighting and cavity wall insulation will have been installed in the majority of applicable dwellings by 2015, but householders cite purchase cost as a the predominant reason for not implementing more energy saving measures in their homes.

A total of £4m of Government funding is available for pilots across England, with £2m available in 2009/10 and the remainder in 2010/11. The pilots will run from October 2009 to April 2011. Announced recently by Ed Miliband, Secretary of State for Energy and Climate Change, the Pilot scheme will pay the up-front capital cost of more expensive low-carbon home improvement measures such as solar technologies and solid wall insulation. Emerging low-carbon technologies take years to pay for themselves and half of householders move within 10 years, making long-term investment an unrealistic option for many.

The pilot aims to find ways of making these technologies more accessible and inspire people to do more. Capital costs of projects could be repaid, for example, with monthly instalments that are lower than the savings on current energy bills. The pilot will trial a range of repayment method through different partners, finance packages and match funding initiatives to find out what works best in different situations and for different communities.

The new funding programme will be run in –a limited number of areas around England to test a range of finance options for householders. Energy Saving Trust has recruited a range of industry experts to sit on an Advisory Board and who will provide their expertise and guidance. The Pilot will measure consumer interest in energy saving finance schemes Assess interest from industry in implementationReview the practicalities of such schemes An Energy Saving Trust evaluation team will assess the effectiveness of the different finance mechanisms and packages, the barriers and practical considerations for partners.

The Energy Saving Trust will seek to work with a range of partners that will be selected through a one stage application process. The application pack will be available from the 9th October 2009 and must be submitted by 6th November 2009. Contracts will be awarded by late November. The Energy Saving Trust will report back in full to the Government in Spring 2011 although interim findings will be available in Spring 2010.

Joan Ruddock, Minister of State - Department of Energy and Climate Change said: “Keeping warm accounts for more than three quarters of the energy used in homes. It makes sense to insulate our homes to save energy, save money on fuel bills and cut emissions. We need to learn how best to finance whole house makeovers and we have engaged the Energy Saving Trust to take forward this important work.”

Marian Spain, Director of Strategy at the Energy Saving Trust said: “We welcome Government's announcement of 'Pay As You Save' pilots. People tell us that the biggest barrier that stops them from making their homes more energy efficient is the need to find money to pay for the upfront costs. Our research shows that householders are more likely to make larger investments, including microgeneration and solid wall insulation, if the costs can be repaid through the savings they make on their energy bills. We look forward to working with Government on the first pilots and assessing the results to see how best to roll this out nationally.”

Notes to editors:

Research by the Energy Saving Trust estimates that with the right policies and support in place, domestic scale renewables have the potential to save 30MtCO2 per year by 2030, reducing household fuel bills and providing a secure energy supply in the process. Solar electricity (PV) systems can shave around £200 off a household’s annual electricity bill but cost between £8,000 and £14,000 to install. Air source heat pumps can save around £700 and 5 tonnes of CO2 per year when replacing electric storage heating, but cost between £5,000 and £9,000 to install, plus the cost of replacing the heat distribution system. · There are around 7 million solid wall properties in the UK; most of which remain uninsulated due to the high upfront costs. The average household could save around £400 a year off their energy bills by installing solid wall insulation, meaning that there is the potential to collectively save over £2.5 billion on household energy bills and 15 million tonnes of carbon dioxide.

The initiative will also support the work the Energy Saving Trust is undertaking with local authorities, social landlords and communities and inform future green finance projects. The schemes will also help to develop markets for selected products, stimulating investment in green technologies. Pilot areas across England are currently being finalised and will be announced in due course; funds should be accessible by winter 2009.

About the Energy Saving Trust

The Energy Saving Trust is the UK's leading organisation set up to try and prevent climate change by helping everybody to cut carbon dioxide emissions – the main greenhouse gas causing climate change – from their homes and transport. We promote the efficient use of energy and a low carbon lifestyle. Through its network of advice centres, the organisation provides free and impartial advice to consumers on saving energy, domestic renewables and greener transport, and is beginning to include water saving and waste reduction advice in its remit. It also works with retailers, builders and industry to make sure that energy efficient products are available for people to choose.

Visit www.energysavingtrust.org.uk or call your local Energy Saving Trust advice centre on 0800 512 012 · Find out about the Energy Saving Trust and its key achievements: www.energysavingtrust.org.uk/corporate

For more information please contact the Energy Saving Trust press office: Gary Hartley / 020 7227 0398 / 0207 654 2611.