U.K.: 'Green Deal' to Expand British Home Insulation Program, Give Free Energy Efficiency Upgrades

A British program to reduce household carbon emissions through home insulation will likely expand to help more residents finance energy-efficient upgrades.

The original program, which the Alliance reported on in March 2009, provides free insulation upgrades to low-income households and the elderly. Starting in Fall 2012, the “Green Deal” will allow those not eligible for the free program to finance 100 percent of the costs of insulation improvements to attics and walls, with repayments made via installments on utility bills (essentially an on-bill financing program).

Notably, it will be available both to homeowners and renters. A commercial counterpart is expected in the near future.

Expansion to Save Money, Create Jobs

With such an expansion, the Green Deal is projected to generate tens of thousands of new jobs – or, according to one claim, nearly 200,000 new jobs. Moreover, the United Kingdom's older, uninsulated homes could save around £550 per year (about $890) with the insulation upgrades that the Green Deal supports.

The British Secretary of State for Energy and Climate, Chris Huhne, announced legislation to scale up the program on Nov. 2, 2010.

Huhne’s party called for the expansion earlier this year, and legislation had been expected since the current coalition government took power this summer. Huhne’s Liberal Democrat party is part of the United Kingdom’s governing coalition, along with the Conservative party.

Green Deal: How It Works

If the legislation passes, homeowners or renters will repay the costs of insulating attics and walls through monthly installments on their utility bills. The repayment charge is linked to the property; if the current resident moves, the charge transfers to the new resident, who continues to benefit from the upgrade. Because repayment is through utility bills, credit ratings of participants are not considered. This is in addition to free insulation upgrades that will continue to be available to the low-income and elderly.

Repayments are designed to be less than energy savings, ensuring customers benefit financially from the start. Though retrofits are carried out by certified contractors and administered by energy suppliers, such as Alliance associate EDF, households can sign up for the program through a number of readily accessible venues – national grocery store chains, for example.

Program Aims to Reduce Household Carbon Emissions, Heating Costs

The Green Deal program is inspired in part by greenhouse gas (GHG) reduction goals set under the existing Carbon Emissions Reduction Target (CERT). CERT requires energy suppliers to meet GHG reductions by helping households reduce their energy usage, with particular emphasis on the low-income and elderly. Insulation of attics and walls has been identified as the most effective way to meet this goal, so 68 percent of the goal must be met with professionally installed residential insulation programs (effectively a type of energy efficiency resource standard). The Green Deal serves as a next-step of the CERT program.

The Green Deal will continue to help the United Kingdom reduce its heavy dependence on imported natural gas and, in particular, help the U.K. government meet its commitment to reducing “fuel poverty,” which occurs when a household spends more than 10 percent of its disposable income on heating costs.

For More Information

To learn more about the Green Deal and view the coalition government’s legislative timetable, visit the Department of Energy and Climate Change.