Pay As You Save energy scheme pilot

Around 50 homes in Stroud will be testing out new ways to finance whole house energy makeovers under the Government's Pay As You Save scheme. Following an open competition, Stroud District Council has been chosen to deliver one of the first ever UK trials along with Birmingham City Council, Gentoo Sunderland, British Gas and B&Q.

This is great news - I've had various reports on how this bid was going through the Scrutiny inquiry into financing domestic energy efficiency measures - Officers and Severn Wye Energy Agency are to be applauded for their hard work in making this happen.

The Home Energy Pay As You Save pilots will basically give households the opportunity to invest in energy efficiency and microgeneration technologies in their homes with no upfront cost. Householders will make repayments spread over a long enough period so that repayments are lower than their predicted energy bill savings, meaning financial and carbon savings are made from day one. The scheme will involve some 500 homes across England in the trial which will provide evidence of how to foot the bill for the Great British Refurb – the Government’s plan to make the 22 million existing homes in the UK more energy efficient.

Of course 500 homes is barely a drop in the ocean of 22 million and one could despair that we are not moving fast enough - indeed I do - but this is a start all be it a very small one - and research shows that schemes like this encourage householders to take up micro-generation. Indeed the Energy Savings Trust have shown that if householders knew that they would get a fair pay-back for the extra energy they produce for the grid then 43 per cent would be more likely to want to install micro-generation (ICM on-line survey June 09).

Indeed the Energy Savings Trust have said previously: "With the right incentives, up to 2 million micro-generation units - solar thermal, PV, heat pumps, wind, micro CHP and some biomass - could be installed by 2020. By 2030 this would save up to 30 million tonnes of CO2, or 5% UK's carbon emmissions. That's the equivalent of having 3 million fewer cars on the UK's roads, and saving the same amount of CO2 as is currently produced by 1.9 million households - which is around 7 per cent of all UK homes, the same as all the households in the East Midlands."

I am delighted by this move as it moves us in the direction Greens locally have been pushing - I have sought, for example, that the Council looks at introducing a ‘ReCharge’ scheme along the lines piloted by Kirklees Council since April 2008. This scheme provides householders with a £10,000 interest-free loan to install specific renewable technologies in their homes (the interest is paid by the Council). The loans are secured against the property and must be re-paid when the property is sold.

Since homes are sold, on average, every seven years in the UK, the scheme becomes more self-sustaining after that period. Kirklees is investing £3 million in this scheme over three years, 10% of which is ring-fenced to help households in fuel poverty, and expects at least 330 properties to be improved. I am sure if this Pay as You Save scheme is a success then it will be more likely that such schemes get the green light to go-ahead.

Here to finish is what Energy and Climate Change Secretary Ed Miliband said in the official press release: "People in Stroud will be testing out on behalf of the nation how we can finance the more expensive home energy refurbishments. Many householders want to reduce their emissions from their homes, but are put off by the upfront cost of installing insulation, solar panels or ground source heat pumps. Pay As You Save will trial different ways of paying for this work so it's affordable. Increasing the energy efficiency of homes not only helps reduce emissions, but will also help reduce fuel bills. One quarter of the UK's total emissions come from homes, so householders represent a key part of the solution to tackling climate change in the UK. Such strong domestic action shows leadership on an international stage as we enter the global climate talks in Copenhagen this week."

See more here.