Government is looking at extending a scheme designed to help householders improve energy efficiency

The government’s Green Deal to provide cheap loans to householders to improve the energy efficiency of their homes could be extended to businesses.

Speaking at the Economist UK Energy Summit, Chris Huhne, the Energy and Climate Change Secretary said that energy saving is the cheapest way of closing the gap between demand and supply, yet it is the “Cinderella of the energy ball”.

The coalition government is putting together proposals for a Green Deal which could see up to 14 million homes benefiting from improved insulation.

Under plans to overhaul the UK’s existing housing stock energy companies and high street retialers will pay upfront for the work to insulate homes and improve energy efficiency. Householders will then pay back the money through the savings they make on their energy bills.

Huhne said tying energy saving to the people who pay the energy bills will be a breakthrough not just for owners but for tenants as well and he added that the government was also looking at whether it could apply to businesses.

“To sustain the market on the long march to a comprehensive refit of our housing stock, we are also looking at triggers and incentives to encourage demand”.

Hans Schreuder, managing director Rockwool UK welcomed the announcement. “By our estimation, UK households waste around £2.9bn on energy bills and pump 15,529,410 tonnes of carbon dioxide into the atmosphere every year through inadequately insulated homes”.

He added that many other EU countries are significantly ahead of the UK when it comes to improving home energy efficiency and the steps outlined by the government will help address this.