Householders will be entitled to borrow money from a green investment bank to pay for carbon-reducing measures
The new coalition government promised a raft of green initiatives in yesterday’s Queen’s speech that will see a radical overhaul of the country’s housing stock and loans to allow more households to invest in measures such as solar panels.
Promising a new energy bill in the next parliament, the new government, led by David Cameron, wants to create a green investment bank that would loan individual households the money to invest in carbon-reducing measures, including insulation.
The plan, which builds on the one announced by the outgoing Labour government in its last budget, is called a “pay-as-you-save” approach. The idea is that households borrowing money to make their home greener would repay the loan using money saved through lower energy bills. Labour originally wanted to create a £2bn fund to which households hoping to access money would apply. The private sector was expected to come up with a similar amount.
The new government hasn’t said exactly how it will work. In the past, the Tories previously promised £6,500 for each home, and the Lib Dems suggested up to £10,000 could be available. These figures may have to be revised upwards as a typical electricity generating solar scheme costs about £15,000, although these amounts would allow householders to invest in cheaper solar water heaters, or a range of insulation measures.
The new energy bill may also contain measures to:
• Require energy companies to provide more information on energy bills in order to empower consumers and to ensure fair access to energy supplies.
• Regulate the carbon emissions from coal-fired power stations.
• Reform energy markets to deliver security of supply and ensure fair competition.
• Put in place a framework to guide the development of a smart grid that will revolutionise the management of supply and demand for electricity.
• Ensure that North Sea infrastructure is available to all companies to ease the exploitation of smaller and more difficult oil and gas fields.
New energy and climate change secretary, Chris Huhne, said: “The Queen’s speech makes clear that energy security and taking real action to tackle climate change aren’t add-on extras for this new government, but are vital to our national interest.