Households earning less than £35,000 will be able to claim free solar panels, heat pumps and other home upgrades under the Government’s new green power offer.
Ed Miliband said the grants for lower-income families would help to cut the cost of living through deploying investment spending previously set out by Rachel Reeves.
These targeted schemes – which will come alongside low-cost loans available to everyone – are intended to allow homeowners and some tenants to switch to lower-carbon forms of heating which can also be cheaper to run.
But the Conservatives have warned that if the price of electricity does not fall, households will end up trapped paying more for their energy.
The new warm homes plan is designed to replace a series of previous government schemes, including the “ECO” programme which was funded by a charge on every household’s electricity bills.
Miliband, the Energy Secretary, told the House of Commons on Wednesday: “Today we announce £5bn of public investment to directly deliver home upgrades for low-income families. This will help families living in social housing and low-income owner-occupiers to have warmer homes and lower bills.
“In setting out this plan, we are abolishing the failed ECO scheme and making the principled decision that we should fund support through public investment, not levies on bills. Our plan also pays heed to all the evidence that says that funding is best delivered with local authorities and mayors in the driving seat—with those representing local people delivering for local people.”
A grant to install solar panels, along with batteries to store excess energy so it can be used later, is typically worth around £10,000. Heat pumps, smart controls such as remotely operated thermostats, and insulation are also among the home improvements which will fall in the scope of the scheme.
The Government claims that switching to a heat pump powered by solar energy usually saves the typical household £550 a year in cheaper bills.
While the precise details of eligibility have yet to be set out, it is expected that the grants will be on offer to households with a total income of around £35,000 or less. It is probable that to qualify applicants will need to be homeowners, but the Government also has plans to encourage landlords to install green tech for renters.
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Ministers have promised that upgrades will be on offer for people living in social housing – for example by setting up “heat networks” which effectively operate as communal heat pumps.
Andrew Bowie, the Tories’ shadow energy minister, claimed that people who switched away from gas heating could end up paying more for their power. He told the Commons: “There is a serious risk that the Government’s legally binding targets are forcing them to push people into buying heat pumps, but all those families will be locked into sky-high running costs, because the Government have a political target that is pushing up electricity bills at the same time. This plan does nothing to address those high ongoing running costs.”
Joanna Elson of Independent Age welcomed the plan, saying: “A cold home is particularly dangerous for older people in financial hardship and is a direct cause of health problems. When faced with high heating costs, older renters on a low income tell us they are forced to cut back on other essentials, like food, to be able to stay warm in their home which is also incredibly detrimental to their health.”
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