Millions of homes to get free insulation from energy firms

GAS and electricity suppliers are to be forced to insulate millions more homes across the UK under measures brought in by the government yesterday.

About 3.5 million more homes will be kitted out with the energy-saving measure, cutting each household's bills by up to 550 a year.

Gas and electricity suppliers already have an obligation to bring about household carbon savings, under a government scheme known as the Carbon Emissions Reduction Target (CERT).

Now new rules have been added to the scheme, to force the suppliers to fulfil their obligations using insulation.

In the past they were meeting the government's requirements by posting out hundreds of millions of free energy saving lightbulbs, the majority of which went unused.

And it was also announced yesterday that the CERT scheme has been extended from March 2011 until December 2012.

The Department of Energy and Climate Change has calculated that by extending the scheme an extra 108 million tonnes of CO2 will be saved - the equivalent of 2 per cent of current household emissions.

However, it is expected that energy suppliers will pass the 2.4 billion they will have to invest onto the consumer.

This will mean the average consumer bill will rise by 50 - an extra 9 in 2012 compared to 41 the CERT scheme currently costs the average member of the public.

Climate change secretary Chris Huhne said: "This is the beginning of a massive and urgent increase in home energy insulation for the nation.

"We are demanding that energy companies work harder to make homes warmer, more environmentally friendly and cheaper to run, especially for those who need it most."

Under the new system, 80 per cent of the measures used by energy suppliers to fulfil their obligations will have to be focused on loft, cavity and solid wall insulation, compared to 60 per cent currently.

And 15 per cent of the homes helped will have to be low income households at most risk of fuel poverty.

Earlier this year it emerged that energy companies were exploiting a loophole in the scheme that allowed them to avoid investing in costly but effective insulation schemes by instead distributing millions of energy saving lightbulbs.

Mailouts of light bulbs to fulfil the obligations have already been banned - and now energy companies are also to be stopped from promoting compact fluorescent lamps.

The government also announced yesterday it will consult this summer on whether to axe the inclusion of subsidised eco-kettles, shower regulators and other energy efficient appliances in the CERT scheme.

Neil Marshall, chief executive of the National Insulation Association said: "We welcome this move by government and recognition of the critical role that insulation has to play in reducing energy bills and tackling climate change."

Director of the Association for the Conservation of Energy, Andrew Warren, said: "It breaks new ground, by mandating a minimum percentage of investment for one specific energy saving option - in this case, insulation."

Already 2.5 million homes across Britain have been insulated since April 2008.