UK plans efficiency retrofits for all homes

LONDON (Reuters) - Britain proposed on Thursday to allow all households from 2012 to apply for loans and cash to save energy and cut carbon emissions, costs energy companies are likely to meet and pass on to all consumers.

Green groups welcomed the plans but criticized a perceived lack of clarity and timidity in timing and funding.

“We need to move from incremental steps forward on household energy efficiency to a comprehensive national plan,” said Energy and Climate Change minister Ed Miliband.

“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,” he told reporters and trade and policy experts.

One proposal under the plans, open for consultation from Thursday, would allow any household to get a loan to pay for insulation or to install renewable sources of heating, and repay that from the resulting energy savings.

The government did not detail how much the scheme would cost, nor exactly who would provide the loans -- which could be energy companies or the public sector.

Under the plans households would also get from 2011 regular cash payments in return for producing heat from fossil fuel alternatives including the sun or waste dumps, a novel idea developed from payments for renewable electricity which many European countries already provide.

Energy companies could also make those cash payments.

The aim was for all UK homes to make near-zero carbon emissions by 2050, the energy and climate ministry said in a statement announcing its “Heat and Energy Saving” strategy.

Britain recently passed a law requiring the country to cut greenhouse gas emissions by 80 percent by 2050 versus 1990 levels.

The government also planned to extend to 2012 an existing, 3 billion pounds scheme to improve home energy efficiency.

That scheme is adding about 35 pounds ($49.79) to all annual household energy bills and allows, for example, low-income households to get free fittings such as low-energy light bulbs.

Under the new scheme, households could apply for “whole-house” re-fits including insulation of walls and lofts, fitting of external cladding on walls, and installation of heat pumps or solar thermal panels which gather heat from the ground or sun, respectively.

That scheme would not kick off in force until 2012 or 2013, and aimed to re-fit 7 million homes by 2020. The government estimated the potential annual fuel saving at 300 pounds ($430) per year per household.

“This plan needs much more investment right now,” said Nathan Argent, head of energy solutions at Greenpeace.

Communities could also apply for cash payments, although not upfront financing, to supply district heating which produces fewer carbon emissions compared with centralized fossil fuel power plants, for example by burning wood or biogas from waste dumps, or by producing combined heat and power.

Under separate support for low-carbon electricity, Britain plans to allow households from April 2010 to earn a premium above power prices for feeding into the grid electricity they produce for example from solar panels, called a feed-in tariff.

Reporting by Gerard Wynn; Editing by Keiron Henderson