Eleven million homes are to be given assistance to lower bills in the largest state-backed initiative to reduce household energy usage for more than four decades.
 
It is believed utility companies are going to fund most of the extra £1 billion allocated for energy-efficiency measures over the next three years when Prime Minister Gordon Brown announces the new energy saving policy.
 
About four million of Britain’s poorest households will be eligible for energy-saving proposals, such as free cavity and loft insulation.
 
More well off households will not be excluded, with some able to claim discounts on improvements that will help reduce energy consumption and fuel bills. The households identified are yet to be defined.
 
But it looks like MPs and union leaders, who were hoping for a windfall tax to pay for help for families to pay heating bills this winter, might be disappointed as this is unlikely to be included.
 
The money will be raised by the utility companies through increased contributions from the six major power companies by up to 30% to meet the carbon emissions reduction target. The current three-year £3 billion scheme makes them pay for help with loft and cavity insulation and low-energy lightbulbs.
 
Rising fuel prices mean that 5.4 million households face ‘fuel poverty’ – having to spend more than 10% of your income on energy costs.
 
The new energy initiative could benefit those keen to install double glazing, lag lofts and carry out other energy-reducing measures.
 
Insulating your home costs about £250, which should be paid back after two years, while insulated cavity walls can save one-third of the heat loss from a home.