Scorecard: Funds

Labour

• Home retrofit finance for homeowners of £10,000.
• Obligation on energy companies to subsidise costs

Government has proposed two funding mechanisms for delivering a major roll-out of insulation and household eco-upgrades:

1. Green Finance - ‘Pay As You Save’ (PAYS) Consumers can access around £10,000 of private sector funding to pay for the cost of eco-upgrades.  Householders would pay back the cost of the measures through savings on energy bills and the cost of the upgrade would be attached to the home, not the owner (find out more about how PAYS works). Government has piloted Pay As You Save projects and is committed to introducing the legislation needed in order to attach a charge to a property. The repayment period is about 25 years.
   
   However, in order to keep interests rates down for householders, the finance should be underwritten by Government to reduce the investment risk.  So far the Government has not committed to doing this. Also, the Government has not offered any additional incentives for householders to take up the PAYS scheme, such as council tax or stamp duty rebates.
   
   
2. Energy company obligation: a requirement for energy companies to subsidise the cost of installing insulation measures, including 100% subsidy for those least able to pay. This is currently called ‘CERT’: the Carbon Emission Reduction Target and would be extended under Labour.

Green Investment Bank: Government is committed to establishing a Green Investment Bank to invest in low-carbon infrastructure, with the Government’s stake funded by the sale of infrastructure assets. The Government will seek to match its contribution with at least £1 billion of private-sector investment.  This could be the ideal vehicle for implementing Pay As You Save finance for homeowners, however Government has not yet said that the fund will be used to finance energy efficiency projects, it will be focused on large scale infrastructure investments.  The Great British Refurb feels that this is a missed opportunity for the mass rollout of household energy efficiency.

Conservative

• Finance up to £6,500 per home, with a higher limit for homes that are trickier to fix
• Obligation on energy companies to subsidise costs

The Conservatives will create a Pay As You Save (PAYS) finance scheme  - called the Green Deal - with a cap of £6,500 for the energy efficiency retrofit of existing homes. This cap is to be increased for those properties that are more expensive to improve due to the nature of their construction but at present it is unclear what that cap is likely to be and how these “harder to treat” homes will be classified.

Funding for the scheme will incorporate all the public funding mechanisms that currently exist for use in homes such as CERT (the obligation on energy companies to subsidise home insulation) and Warm Front  (which improves the heating and insulation of social housing) ensuring that all funding for energy efficiency is used to best effect.  The remainder of the scheme will be funded by private finance. Householders will pay back the loan over a term of up to 25 years.

Will create a Green Investment Bank but there is no specific mention of using this to fund  energy efficiency in homes.

No future obligation on energy companies beyond the current round of CERT.

No other financial or fiscal incentives, such as council tax rebates, or reduction of VAT on low energy refurbishment, identified.

No Government underwriting of funds to ensure a low interest rate for PAYS.

Liberal Democrat

• Finance for £10K home energy improvements
• One year only eco-cash incentive offer for some improvements

The Liberal Democrats would initiate a 10 year programme of home insulation, offering every home an energy improvement package of up to £10,000 per home paid for through the savings from lower energy bills. To access the funds, householders would be required to have an assessment,  identifying the works required and the associated savings.

The funding for this scheme would be through Government-backed bonds and administered via Local Authorities.

Launch of an “eco cash-back” scheme for one year only that provides £400 for installing double glazing, replace an old boiler or install micro-generation.

Will also set up a UK Infrastructure Bank but no details on what this will fund.

No obligation mentioned on energy suppliers.

This multi-manifesto analysis explicitly does not recommend or endorse any one political housing policy over another. All the Great British Refurb campaign partners are politically neutral.