It is called “Pay As You Save”. It’s based on a simple premise: that the cost of installing energy efficiency measures be funded through the future savings made on that household’s energy bills.
So how does it work? The majority of home energy efficiency measures pay for themselves over a period of time.
Some are quite cheap, such as loft and cavity wall insulation or low-energy lighting.
But others are more expensive, such as suspended wooden floor insulation, new A-rated boilers and particularly solid wall insulation.
Most of us put off installing these measures, particularly the more expensive ones, because we do not think we will get the benefit. It just costs too much upfront; and given we move house, on average, every seven years, why bother?
Pay As You Save is designed to address this problem. Firstly, the upfront cost of measures, for example £10,000, is put up by a third party (such as a bank, retailer or local authority), not the consumer.
Next, your home gets its makeover, carried out by trained and accredited builders, and as a result energy usage is slashed by around half.
Then, from the savings on energy bills, a “standing charge” is repaid, every month, until the original lump sum (plus some interest) has been paid off.
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