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UK Energy and Climate Change Department starts 'Pay as you save' pilots for refurbishment of homes

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The UK 'Home Energy Pay As You Save' pilots will 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. A total of around 500 homes across England will take part 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.

Homeowners in Birmingham, Sunderland, London Borough of Sutton and Stroud will be testing out new ways to finance whole house energy makeovers under the Government’s £4m Pay As You Save scheme. Following an open competition, Birmingham City Council, Gentoo Sunderland, British Gas, B&Q UK and Stroud District Council have been chosen to deliver individual projects in the first ever UK trials.

Energy and Climate Change Secretary Ed Miliband said:

“The next two weeks in Copenhagen are crunch time for the planet. The UK has taken a lead in putting solutions on the table throughout the process so far and I’ll not rest until we have the most ambitious, effective and fair deal possible."
“Our credibility abroad is based on our ambition at home. We’re the first country to put carbon targets into law, and our target of an 80% reduction by 2050 is one of the most ambitious."
“Many British householders want to reduce their emissions, 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."

“One quarter of the UK’s total emissions come from homes, so householders have to be a part of the solution to climate change. Increasing the energy efficiency of homes not only helps reduce emissions, but will also help reduce fuel bills.”

DECC (Department of Energy and Climate Change) is keen to learn whether the PAYS scheme is attractive to consumers and how, in the medium term, it could be a method for enabling more householders to invest in the energy efficiency of their homes.

The PAYS pilot will run until April 2011. Around 500 homes across England will take part. A total of £4m in funding has been awarded from DECC to pay for the pilots. The pilot is managed by the Energy Saving Trust. The Energy Saving Trust ( is the UK's leading organisation set up to try and prevent climate change by helping everybody to cut carbon dioxide emissions – the main greenhouse gas causing climate change – from their homes and transport. For free energy saving advice call a local Energy Saving Trust advice centre on 0800 512 012. The pilot will run with 5 partners:

1. Gentoo Group Ltd: Registered Social Landlord, Gentoo Group Ltd will be working with householders in the North East. Over the next 18 months Gentoo will identify a mix of both void and occupied properties in the Sunderland area which they will retrofit with energy efficiency and microgeneration measures.
2. British Gas: British Gas will be trialing energy efficiency packages in the South East as part of the pilot. For the Pay As You Save package, British Gas will offer homeowners microgeneration and energy efficiency measures at no upfront cost. The customer will make regular repayments to British Gas to pay for the measures and will start saving energy from day one. The energy bill saving over the lifetime of the products will exceed these repayments. The second finance option to be trialed will be repayments over a shorter period of time with the customer potentially paying some of the upfront cost. British Gas will use its experience in marketing and communications to identify households that would be interested in energy efficiency and microgeneration. Interested households will receive a free energy efficiency audit and be provided with a personalised energy saving report before choosing the measures and financial package best suited to them. From the trial, British Gas and the Energy Saving Trust will learn which communications methods, financial plans and energy measures customers prefer. This information will be used to help stimulate this important market.
3. Birmingham City Council: Birmingham City Council’s activity will form part of the £35m Green New Deal (GND) project. For the PAYS project householders will receive whole house assessments. The project will be delivered in partnership with Birmingham Credit Unions which will manage the repayment process. The project will seek to co-ordinate other regional or local funding on behalf of householders.
4. B&Q UK: B&Q UK will lead a PAYS project in partnership with the London Borough of Sutton and the Bioregional Development Group (BDG). To deliver the project B&Q UK will develop its advice services to include training for Eco Advisers and the introduction of a ‘Shop Within A Shop’. Homeowners will be allocated a project manager to help them through the entire process. London Borough of Sutton will manage the repayment process and BDG will support with training and evaluation.
5. Stroud District Council: As part of Stroud District Council’s (SDC) wider programme of carbon reductions – Target 2050, it will work with Severn Wye Energy Agency (SWEA) to deliver energy saving home improvements to local homes. SDC will manage the repayment process and SWEA will project manage the advice and installation process throughout. The pilot will help to build further upon the local network of installers and ‘exemplar homes’ which illustrate the process of reducing carbon emissions from a range of existing house types.