Tories outline £6,500 "green deal" for homeowners

The Conservatives will today set out plans for a "green deal" that would provide homeowners with an allowance of up to £6,500 to make energy-efficiency improvements to their home while also providing increased funds to help train green builders.

Shadow energy and climate change secretary Greg Clark will tell the Conservative Party conference that a Tory government would set up a scheme that would allow energy firms or charities to undertake green home makeovers for free and then recoup the cash by taking a share of the homeowner's energy bill. He will argue that under the scheme the homeowner will be better off as the payments will be more than offset by the lower energy bills that result from the improvements.

"We're going to put a big emphasis on opening up the market not only for energy companies but for social enterprises, charities and trusted brands," Clark said. "And we'll be talking about green apprenticeships to go with it, a programme to get people trained to do this."

The move largely mirrors government proposals for a green pay-as-you-save loan scheme, which was released for consultation earlier this year and proposes that households are provided with low-interest loans to help fund green home improvements. The loans would then be repaid using the savings realised through the energy-efficiency improvements.

However, Clark is expected to stress the absence of any upfront cost through the new deals and position the Conservative initiative as a deal between the household and the organisation providing the refurbishment rather than as a loan.

The £6,500 sum falls short of the £10,000 recommended in a recent report from the UK Green Building Council (GBC) as the amount required to complete full-home makeovers, but the move still secured support from a number of environmental groups including the GBC.

Paul King, chief executive of the GBC, hailed the proposals as "a big step in the right direction", adding that the scheme would "unlock a fantastic new market for refurbishment".

"The upfront capital cost has been an understandably big barrier for most people," he said. "But this type of scheme allows householders to pay for the work from the savings they make on their energy bill – and still be better off as a result."

His comments were echoed by Colin Butfield, head of campaigns at WWF-UK, who said that the large sums on offer through the scheme would serve to genuinely transform domestic energy efficiency. "The Conservatives have hit the nail on the head by proposing to remove the upfront costs of energy-efficiency improvements," he said. "Ultimately, what gives this policy the potential to really deliver carbon savings is its willingness to tackle the expensive-to-treat homes that require more than cavity wall and loft insulation. "