This Government plan involves giving loans to homeowners to fund projects such as the installation of solar PV panels and ground source heat pumps, to make their homes more eco-friendly.
The scheme involves the loan being paid back over a long enough period where the savings on energy bills outweigh the payback costs, thus producing a monthly surplus for the homeowner. This is known as the ‘Pay As You Save’ programme, allowing lower income families to overcome the financial barriers in making their homes more energy efficient.
Officials also say that there is a clear price differential between energy efficient and energy inefficient homes, as better insulation or the installation of solar panels would significantly reduce household energy bills. This financial boost offers homeowners a greater incentive to invest, particularly during this time of economic instability.
Although some may argue they will not be living in the house long enough to pay off their loan, the government are introducing legislation to attach the loan to the house, and not the current homeowner. They intend to enforce the loan repayments as they would enforce council tax payments, as these repayment laws are more stringent; hopefully this will encourage banks to get involved and lend the money to householders.
As the UK’s housing stock currently accounts for one quarter of the Country’s greenhouse emissions, Ed Miliband argues that an initiative like this ‘will help protect people from upward pressure on bills, tackle climate change and make us much less reliant on imported energy’.