Home Insulation Scheme Reforms Announced

2 December 2013

In a shakeup to its energy efficiency schemes, the Government has announced changes that should result in lower fuel bills without compromising current carbon reduction targets, it has been revealed.

As expected, Chancellor of the Exchequer George Osborne announced a series of reforms to the Energy Company Obligation and Green Deal during his Autumn Statement.

The controversial schemes have been under fire since energy companies blamed them for rising fuel bills. With a rift developing between the Conservative and Liberal Democrat sides of the coalition Government, change has been expected.

The changes will see bill payers save around £50 on their dual fuel bill based on the projected levels.

£12 of those savings will come from a straight rebate, which the Government has promised for a two-year period. £5 will come from a one-off cut obtained by cutting network costs. £30 to £35 will be cut from Energy Company Obligation levies.

Despite the potential savings, customers are likely to still see their bills rise in the New Year as the savings announced do not offset the increases announced by most energy suppliers last month. The Government is hoping that customers will be placated because the impending rise will not be as high as first expected.

Campaigners urging the Government to back the Energy Company Obligation feared that cutting its funding would lead to more households slipping into fuel poverty and more excess winter deaths. The Government has made a pledge to continue aiding the country to become more energy efficient.

The scheme will be fine-tuned to ensure that it continues to offer support to the poorest households, with free Loft Insulation, free Cavity Wall Insulation, and free boiler replacement still available for those that meet specified parameters.

The number of households receiving free Solid Wall Insulation will drop as the Government eases the energy company’s commitment to installing external insulation. Instead, more focus will be giving to installing Cavity Wall Insulation and Loft Insulation in a short timeframe, meaning more households can benefit.

Solid Wall Insulation could still be free to those that meet requirements.

In a move that will go down well with homebuyers, the Government has revamped the Green Deal, confirming that £1,000 will be removed from stamp duty for those purchasing a house that requires energy efficiency improvements. £4,000 will be made available to those purchasing a house that requires particularly expensive energy saving measures.

The Government will also look to work with landlords to help them use the Green Deal to improve the energy efficiency of their property, with 15,000 of the worst energy-leaking properties being given preferential treatment over each of the next three years. Again, the main focus will be on home insulation measures such as Loft Insulation and Cavity Wall Insulation.

The Energy Company Obligation will also be extended to 2017.

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