Making your home more energy efficient saves you money and goes a long way to helping the environment.

However, it’s not always possible to meet the costs of improving your home and reducing your energy bills. Insulation, new heating and solar panels can all cost significant sums and so helping cut your bills and carbon emissions isn’t possible for everyone.

However, there are now a wide number of grants available. Grants contribute some or all of the cost of energy efficiency measures and are designed to encourage you to cut the energy use in your home. There are lots of grants available from the government and energy suppliers and they could help you save money as well as doing your bit for the environment.

Use Government Grants To Make Your Home More Energy Efficient

Sample Offers

Benefits of making your home more energy efficient

There are many benefits to making your home more energy efficient. These include:

• Reducing the amount of energy that you use, saving you money on your energy bills
• Reducing your home’s carbon emissions – one of the main contributing factors to climate change
• Encouraging your children and your family to become more energy aware
• Improving your home to make it more desirable when you come to sell it
• Making your home a more comfortable place to live in

Ways in which grants can help you improve the energy efficiency of your home

There are three simple ways that you can use grants to help improve the energy efficiency of your home. These are:

• Insulating – Installing cavity wall and loft insulation stops heat escaping, making your home warmer and more environmentally friendly. It also results in lower energy usage and lower bills
• Heating – Installing a new boiler can significantly improve the efficiency of your hot water and heating system, saving you money on your energy bills and reducing your carbon emissions
• Powering – Generating your own electricity will reduce the amount of power you need to buy, reduce your carbon emissions and can also help you generate an index linked, tax-free income

How energy efficient grants can help

Successive governments have offered funding to encourage people to make their homes more energy efficient. In addition, many energy suppliers also offer discounts and grants in an attempt to help them meet their green energy targets.

By taking advantage of these grants, you’ll reduce the amount of energy that you use, reduce your energy bills and carbon emissions and make your home warmer and more comfortable.

Where energy efficiency grants come from

There are three main sources of energy saving grants and offers. These are:

• The government – Funding is provided by the government to improve the heating and energy efficiency of homes. In England the scheme is known as Warm Front, in Northern Ireland it is Warm Homes, in Scotland it is the Energy Assistance Package and in Wales it is NEST. There are lots of schemes available to help with the cost of replacing boilers or installing insulation, although bear in mind that with some schemes you need to be in receipt of certain benefits, whilst others are available to anyone over a certain age. The eligibility criteria for the schemes differ between countries.
• Energy Suppliers – Suppliers of energy in the UK are obliged to achieve targets for improving energy efficiency through the government’s Carbon Emission Reduction Target (CERT). Energy suppliers therefore provide a range of offers which significantly reduce the cost of installing energy efficiency measures and you can often take up offers from any of the energy companies, regardless of who supplies your gas and electricity.
• Local authorities – Many local authorities offer energy saving grants to install energy efficiency measures in your home. Check with your local council.

Grants for insulation

Everyone who owns or rents a home in the UK are eligible for grant funding of between 50 and 100 per cent of the cost of loft insulation, whilst grants of around 50 per cent upwards are available to people for cavity wall insulation.

About a quarter of heat from UK homes is lost through the roof and around a third takes place through external walls. Insulation can therefore be installed in your loft (to a depth of around 27cm) and, if your home was built after around 1920, you should also be able to benefit from cavity wall insulation.

Remember that grants cannot be offered after you have insulation installed or if you undertake the work yourself. The insulation installation has to be carried out by an accredited installer, who will offer the grant at the time.

You should be eligible for a 100% grant towards loft and cavity wall insulation if you are over 70 years old OR you receive certain types of benefits. These benefits include:

• Disability living allowance
• State pension credit
• Income based Jobseekers Allowance
• Working Family or Child Tax credits (income of £16,190 or less)
• Attendance allowance

If you aren’t eligible for the full 100% grant, you can normally still apply for a partial grant of 50-70% and under certain circumstances.

Grants for heating

Over recent years, the government has encouraged people to replace old boilers with new energy efficient and environmentally friendly boilers.

They have made grants available to people who would otherwise struggle to replace their old heating system. If you qualify, you can get up to £3,500 towards a new boiler in order to make your home more energy efficient.

To qualify you must be 60 or over, have long-term ill health or a disability, or have a child under 16 years old and be in receipt of certain benefits.

Grants for generating your own energy

To encourage more and more households to generate their own energy, there are now grants and discounts available for people who want to produce their own power. The most common ways of doing this are:

• Installing solar photovoltaic (PV) panels
• Installing a wind turbine
• Installing a small hydro electric system

Installing your own method of generating electricity also allows you to join the government’s ‘feed-in tariff’ scheme. This scheme pays you for every unit (kWh) of energy that you create plus you can also earn money from selling power that you don’t use to the National Grid (the ‘generation tariff’).

Those taking advantage of these schemes in 2011 will have their tariffs set at a higher level than those who wait until 2012 and subsequent years. All of these tariffs are index linked and tax free. They have been calculated to give a return of 8-10% which is an attractive investment opportunity, as well as helping you to lower your carbon footprint.

While there is an initial cost for installing solar PV panels or a wind turbine, the financial benefits you can enjoy can help you significantly reduce your energy bills and save money over the medium to long term.

Alternatively, some energy companies will supply solar PV panels for free, as long as you sign over your rights to the financial benefits of the tariffs that are available (the energy company will take the ‘feed-in’ and ‘generation’ tariffs).

However, before you commit to a scheme it is important that you weight up the costs. While ‘free’ solar panels may seem preferential, you will lose the benefit of an index linked, tax free income for many years.

Insider Buying Advice

Typical Costs

The costs of making your home more energy efficient vary significantly depending on the size and type of your home. However, typical costs are:

• Insulating – Loft insulation should cost around £250-300 to install while cavity wall insulation can cost around £200-500. Grants may bring the actual price of cavity wall insulation down to as little as £149 and the cost of loft insulation down to £199 (depending on survey and the size of your home).
• Heating – Boilers can vary from around £400 from your local DIY store up to around £3,500 for a high quality boiler professionally fitted. If you qualify for a grant you can get up to £3,500 towards a new boiler in order to make your home more energy efficient.
• Powering – An average solar PV system (2.7kWp) costs around £10-12,000 (including VAT at 5%). As mentioned above, some energy companies will install the panels for free

Calculating Your Return On Investment

Insulating
While there may be a small cost for installing insulation (even if you receive a grant) the savings offered by loft and cavity wall insulation should pay for the work in just a few years.

British Gas estimate that adding loft insulation can save you £110 every year while the Energy Saving Trust say that installing loft insulation (where you had no insulation before) could knock £145 off your annual energy bill.

Cavity wall insulation can also save you around £110 every year on your energy bills.

This means that these insulation improvements will pay for themselves in around 2-3 years, allowing you to save significant sums in the medium to long term. If you qualify for a 100% grant you could start saving straight away.

Heating
According to the Energy Saving Trust, a high efficiency condensing boiler could save you as much as £225 a year on your energy bills. If you install good quality heating controls, you could save even more.

While it may be expensive to install a new boiler, experts believe that you can start to save money within 3-5 years of installation. And, with the average lifespan of a boiler being 10-15 years, choosing an energy efficient boiler can result in significant long-term savings.

If you do qualify for a grant towards a new boiler you could start saving on your energy bills immediately.

Powering
If you were to generate the average amount of electricity (1,955 kWh) you can expect to save around £140 on your electricity bill as well as around £880 from the government’s generation and feed-in tariffs.

Your total savings would therefore be in excess of £1,000 per year. Feed-in tariffs are also index-linked, meaning they will hold their values during the lifetime of your solar panels.

For a 2-3 bed house this could mean you’ll cover the cost in around 10 years, while the system could last 35-40 years.

If you accept a deal to have panels installed for free, the energy companies will take the income generated from the tariffs and so your savings will be considerably lower.

Of course, as well as reducing your energy bills these improvements will also significantly reduce your carbon emissions. Not only will you save money but you’ll also help the environment.