Government beefs up home insulation programme

Chris Huhne has today strengthened the Department of Energy and Climate Change's (DECC) flagship domestic energy efficiency programme, tightening the rules of the scheme in order to force energy firms to increase investment in insulation schemes.

Under the previous government's Carbon Emissions Reduction Target (CERT), energy firms were required to invest around £3bn over three years in improving the energy efficiency of domestic customers' homes.

However, earlier this year it emerged that energy companies were exploiting a loophole in the scheme that allowed them to limit their investment on costly but highly effective insulation schemes by instead distributing millions of energy saving lightbulbs.

According to figures from regulator watchdog, 224 million bulbs have been distributed since the scheme was introduced in 2008, despite the fact that many remained unused with almost 10 bulbs going to each household.

In contrast, just under one million cavity walls were insulated during the first two years of the scheme, well short of the government's target of 2.9 million installations.

DECC subsequently blocked energy firms from counting the free distribution of light bulbs towards their CERT spending targets at the start of the year, but they were still permitted to promote discounted offers for light bulbs as part of their CERT obligations.

Huhne announced today that the rules governing the scheme would be tightened to ensure that the bulk of the £2.4bn still to be invested by energy companies through the scheme is spent on effective insulation projects.

"This is the beginning of a massive and urgent increase in home energy insulation for the nation," he said, adding that the CERT scheme would also be extended until late 2012 when the coalition's planned Green Deal loan initiative is scheduled to be launched.

"We are demanding that energy companies work harder to make homes warmer, more environmentally friendly and cheaper to run, especially for those who need it most," he said.

Under the new rules, over 80 per cent of CERT work carried out by energy companies must involve DIY or professional installation of loft, cavity and solid wall insulation. Previously, just 60 per cent of CERT obligations had to be met through insulation schemes.

Meanwhile, firms will be banned from promoting energy efficient compact fluorescent bulbs (CFL) in order to prioritise insulation and DECC will consult this summer on whether to also axe the inclusion of subsidised eco-kettles, shower regulators and other energy efficient appliances in the scheme.