Minister unveils 'great British refurb' to cut household emissions one-third by 2020 with insulation and low-carbon technologies
Cavity wall and loft insulation will be available for all suitable homes, with plans to retrofit 400,000 homes a year by 2015. Financial incentives for householders will also be available for low-carbon technologies such as solar panels, biomass boilers and ground source heat pumps, paid for by a levy on utility companies.
The government wants a quarter of homes (7m) to benefit from the schemes by 2020, extending to all UK households by 2030.
The strategy could help cut household carbon emissions by a third by 2020, part of its target to reduce overall UK emissions by 80% by 2050. Currently, homes account for 27% of the UK's carbon emissions through heating and power.
The plans were welcomed in principle by green groups and energy campaigners, though many were still concerned by the lack urgency in the proposals – which might only begin in 2012 – or detail on how the majority of the plans will be funded.
"We know the scale of the challenge: wasted energy is costing families on average £300 a year, and more than a quarter of all our emissions are from our homes. Energy efficiency and low-carbon energy are the fairest routes to curbing emissions, saving money for families, improving our energy security and insulating us from volatile fossil fuel prices."
Under the proposals, a Renewable Heating Incentive would tax utility companies and then use the money to build up smaller-scale energy networks. A spokesman for the Department of Energy and Climate Change (DECC) said the levy, intended to start in 2011, would not affect today's household bills. "We have to consult on how it will work and, in fact, our proposals would have little impact on prices for many years, apart from cutting billing for those who take up the offer of help."
In addition, householders could be paid for any electricity they feed into the national grid from their power-generating facilities.
Miliband said the challenge to retrofit homes was similar to the UK's "dash for gas" in the 1960s. "Every cooker, every boiler, every gas fire in the country had to be adjusted. Changing more than 32 million appliances, of 8,000 different makes and models. Each appliance, house by house, visiting more than 14 million homes. And in today's prices, the cost they estimated for this was almost £6 billion. Why did they do it? Because they thought long-term and realised that the shift that they started before I was even born would still benefit us today. We face the same situation again."
Paul King, chief executive of the UK Green Building Council (UKGBC) said the proposals were suitably ambitious but also needed the Treasury behind them. "As Lord Stern said yesterday, energy efficiency in homes and buildings should be part of a green stimulus. Financial incentives are needed to encourage major green refurbishments – the precedent has already been set with stamp duty rebates for zero-carbon homes."
According to Greenpeace UK, a programme to upgrade the housing stock alone would require £3.5-£6.5bn per year until 2050. Nathan Argent, head of energy solutions at Greenpeace, said: "Tackling energy efficiency is the fastest way to cut emissions, boost our energy security, revitalise the economy and create tens of thousands of jobs. And, obviously, this will cut household bills too. But this plan needs much more investment right now. The government needs to put their wallet where their mouth is."
Miliband said that costs of efficiency measures would pay itself back over time in reduced bills. Despite that, he said there should be no upfront cost for consumers and part of today's consultation will look for ways to finance the strategy - energy companies, local authorities or even private companies might foot the bills for the necessary refurbishments.
Andrew Warren of the Association for the Conservation of Energy was concerned that the government had redefined the meaning of insulation to meet its current insulation targets, set by Gordon Brown last year, of getting 6m homes fully insulated over the next three years.
"Most people think of insulation as the stuff you shove in your loft or put around your walls," he said. The current DECC definition, he said, can also include draft-proofing of letterboxes or replacing windows. "At the moment, even by the most generous interpretation, you're not even halfway towards the 6m [target announced by Gordon Brown].."
Danny Stevens, policy director of the Environmental Industries Commission said that setting targets for energy efficiency was not enough. "All we have today is the launch of yet another consultation. This undermines the urgency of tackling climate change and ignores the huge economic benefits of ambitious environmental protection measures."
That sentiment was echoed by Philip Sellwood, chief executive of the Energy Saving Trust (EST), who said the time for talking is now over. "We are not short of ideas; we just need action and now. Armed with the knowledge that 70% of our current housing stock will still be around in 2050, we know we need to be bold."
He added: "If we throw everything at our existing housing stock – based on today's technologies only – we could reduce household carbon emissions by 50%."
The EST said there are 7.3m cavity walls that could be filled with insulation, 7m solid walls that could be insulated, and 12.9m lofts which do not have the recommended depth of insulation, and 4.5m G-rated (the least efficient) gas boilers.
Shadow energy and climate change secretary Greg Clark said the government was "delaying rather than getting on and adopting our scheme immediately, when it is desperately needed."
Last month, the Conservatives proposed giving an allowance of up to £6,500 to every household in the UK for energy efficiency improvements, the same figure announced today by the Lib-Dems to refurbish homes.
In their Warm Homes strategy, the party aims to upgrade more than two million homes a year for 10 years, and would award the contracts to regional building companies rather than large national companies such as Wimpey and Barratt.
Today's Decc strategy also includes ideas to encourage microgeneration, where homeowners and local communities generate their own heat or power.