Middle-income households will receive grants worth up to £15,000 to make their homes more energy efficient.
Grant Shapps, the business secretary, will announce plans next week to fund loft insulation, cavity wall insulation and smart heating controls.
The new fund, called “eco plus”, will be aimed at those who are able to pay, unlike other energy efficiency schemes.
The government has allocated £1 billion in funding from existing budgets for the next three years. Ministers will consult on plans to make the money available to people in council tax bands A to D. The government will meet 75 per cent of the cost of any upgrades.
The scheme, which will run from April, will cover efficiency measures for more than 70,000 homes and save hundreds of pounds a year. Unlike the green homes grant, which was axed last year after a disastrous start, it will be administered by energy suppliers.
Ministers believe that people will make significant savings. Installing loft insulation can cost up to £1,100 but save £640 a year, and cavity wall insulation costs as much as £2,500 but can save £525 per year. Smart heating controls such as advanced thermostats and thermostatic valves cost up to £800 and can save £525 a year.
The scheme is part of measures that will be announced by the government in an attempt to cut people’s energy use by 15 per cent by 2030.
It was reported yesterday that ministers were preparing to announce a public information campaign at a cost of £25 million encouraging people to use less energy. Jeremy Hunt, the chancellor, said that people would be joining a “national mission” to reduce “energy dependency on what Putin chooses to do”.
