Green firms target Brown's energy efficiency give away

Businesses are today mobilising to meet an expected increase in demand for energy efficient products and services, in the wake of the government's announcement of an extra £910m in funding to help the fuel poor.

After weeks of negotiations with energy companies, the government today announced that energy providers are to increase the amount they contribute towards energy efficiency schemes and winter fuel payments by around 30 per cent.

Business secretary John Hutton insisted at a press conference this morning that these costs would not be passed on to consumers. "If there is any evidence that customers are being ripped off ... then the government will not hesitate to intervene," he warned.

The aim under the new scheme is to fully insulate every home in Britain by 2020.

The new funding will be delivered over three years and will split into two areas with about £560m going into an existing energy efficiency programme called the Carbon Emissions Reduction Target (Cert) and the remaining £350m contributing towards a new £700m Community Energy Saving Programme.

The two initiatives seem similar at first glance with both obliging energy suppliers to improve energy efficiency in the home, encouraging measures such as loft and cavity wall insulation. But while Cert gave the energy suppliers the choice of how to contact customers, the Community Energy Saving Programme will focus on deprived areas and will mandate a street-by-street approach to inform people of the free services that are on offer.

The measures will see up to 11 million households offered free loft and cavity wall insulation in the next few years and others a grant covering 50 per cent of the cost. According to the government, better wall insulation could save households more than £150 a year, while better roof insulation could save £50 per year.

The government said that in addition to writing to their customers, energy companies will pool resources and sub-contract work to local councils, voluntary organisations and social enterprises to promote the initiatives.

To support the scheme, adverts will appear in national newspapers tomorrow, followed by television adverts later this month. In addition to promoting energy efficiency, the campaign will encourage people to compare suppliers to get the best energy deals, measure usage carefully, and use direct debit payments.

The schemes are also expected to offer a range of opportunities to businesses seeking to address the growing market for energy efficient products and green building refurbishment.

Andrew Long, chief executive of home energy auditing service Green Homes Concierge, said private auditing companies could play a pivotal role in helping people reduce energy use. "It is essential that private companies have the ability to go in and make these energy reductions," he said. "It is crucial for both the British public in terms of financial savings, and for the long term effect on the environment."

Meanwhile, a spokesman for B&Q said the company would consider further promotional deals on insulation materials to tie in with the expanded government programme, adding that it already offers a range of promotions alongside the Cert initiative.

The construction industry is also expected to receive a much needed boost from the programme, with experts claiming that the previous skills shortages that have hampered home insulation schemes are unlikely to be repeated at a time when many builders are struggling to find work.

However, several green businesses criticised the new programmes for not going far enough.

Joel Hagan chief executive of smart meter provider Onzo said the government had overlooked an important issue by not encouraging the use of devices that show householders in real time how much energy they are using. "These devices are vital in giving people help to cope with the rising cost of fuel and also in the fight against climate change," he said.

Similarly, Nigel Rees, chief executive of the Glass and Glazing Federation, criticised the government's decision to again exclude double and triple glazing from the extended schemes arguing that energy efficient windows could cut UK fuel bills by more than £2.3bn a year.

As well as the energy efficiency package, the government also announced that it will triple cold weather payments – a scheme to give certain disadvantaged groups money if the weather remains below zero degrees for more than a week – from £8.50 to £25 a week.

However, an alliance of cross-bench MPs, environmental groups, trade unions and charities said none of the new measures were enough to help the fuel-poor survive the winter and renewed calls for a windfall tax on energy company profits.

Ed Matthew, head of UK Climate at Friends of the Earth said that an increase in investment that amounted to £350m was " completely inadequate" as a means of cutting household energy use. Meanwhile, Unite general secretary Tony Woodley said that the government's measures would not take effect quick enough to cut bills this winter. "Only a windfall tax can provide the urgent help necessary, that is money to help make ends meet," he said. "That money must come from those responsible for the criminal charges in the first place, the greedy energy giants."