Government launches green home trial

The government has chosen the first day of the Copenhagen Summit to formally launch a green home loan pilot scheme. It is designed to help households cut their carbon emissions while moving forward with plans to curb emissions from energy generation and roll out new carbon capture and storage systems.

Speaking ahead of the summit in Copenhagen where he will lead the UK's negotiating team, energy and climate change secretary Ed Miliband said the talks would increase pressure on the UK to accelerate its plans to cut carbon emissions.

"The UK has taken a lead in putting solutions on the table throughout the [Copenhagen] process so far and I will not rest until we have the most ambitious, effective and fair deal possible," he said. “Our credibility abroad is based on our ambition at home."

He added that with households responsible for a quarter of UK emissions, domestic efforts to cut emissions were essential. He predicted that the government's Pay As You Save trial scheme to provide loans to help households cover the upfront cost of green home improvements would prompt considerable interest from people keen to cut emissions and energy bills.

“Many British householders want to reduce their emissions, but are put off by the upfront cost of installing insulation, solar panels or ground source heat pumps," he said. "Pay As You Save will trial different ways of paying for this work so it is affordable."

The Pay As You Save scheme will be trialled from today in Birmingham, Sunderland, Stroud and the London Borough of Sutton. About 500 homes are expected to be involved in the trial, which will run until April 2011.

Under the scheme, homeowners keen to invest in energy-efficiency measures or small-scale renewable energy systems will receive low-interest loans that will be spread over a long enough period to ensure that the repayments are lower than the energy bill savings that result from the improvements to the building. The loan will be attached to the property rather than the individual, so that whoever benefits from the lower energy bills picks up the repayments.

The scheme will be operated by a mix of local government bodies and private sector firms, with Birmingham City Council, Gentoo Sunderland, British Gas, B &Q UK and Stroud District Council chosen to deliver individual projects following an open competition.

The launch of the trial comes as the government's energy bill today prepares for its second reading in the House of Commons.

The bill includes several measures designed to drive forward the government's low-carbon transition plan, including legislation to enable a levy on energy bills to help pay for at least four carbon capture and storage demonstration projects and an extended remit for industry regulator Ofgem that will require it to include emission reductions and energy security in its assessment of consumers' interests.