Scrappage scheme will boost boiler market
The Chancellor Alistair Darling announced £200m worth of measures to tackle energy efficiency in his pre-budget statement.
Following the success of a similar initiative that rejuvenated car sales, £50m is to be allocated to a ‘boiler scrappage’ scheme that will provide householders with £400 towards the cost of replacing Sedbuk G rated boilers with up-to-date condensing alternatives.
About 125,000 consumers could take advantage of the subsidy giving a welcome boost to the otherwise flat boiler replacement market. However, the scheme is already being dismissed in some quarters as a 'drop in the ocean' as there are thought to be 4.2 million ageing, inefficient boilers installed in British homes and the ‘scrappage’ fund would have to be expanded to £1.7 billion to reach them all.
The Government has not announced when the scrappage scheme will start, but energy supplier NPower has already seized the initiative by announcing its own £400 ‘top up scheme’. This could effectively double the subsidy to £800 on boilers that are over 10 years of age, but as there is no start date for the Government scheme NPower is urging potential customers to make the change to Sedbuk A boilers now.
The company also announced that the householder does not have to be a NPower customer to qualify, but NPower will have to carry out the installation.
The Department of Energy and Climate Change (DECC) said it would start the scrappage scheme “as early as possible next year”.
Mr Darling also announced that a further £150m will be allocated to the Warm Front scheme in 2010 to help 75,000 of the most vulnerable households with heating and insulation. This is aimed at lifting families out of fuel poverty as it is now estimated that four million are officially ‘fuel poor’ following recent rises in fuel bills.
Discounts provided by energy companies on energy bills for vulnerable households are to double from £150 million to £300 million by 2013-14. The Government said that a further one million people will be helped out of fuel poverty as a result.
*Income from feed-in tariffs (FiTs) will be tax free, according to the Chancellor. Homeowners using microgeneration technologies like solar PV and combined heat and power (CHP) are in line to gain income at 5p per kWh from any electricity exported to the Grid from when FiTs come into effect next April. Mr Darling believes this could save a basic rate taxpayer £180 a year on the average £900 earned annually by microgenerators.