More than 200,000 homes in Birmingham could benefit from a ground-breaking £1.3 billion green energy scheme.
In one of the largest initiatives of its kind, the city council is backing a 15-year eco-refurbishment project that will provide free loft and cavity wall insulation, double glazing, draught proofing and efficient boilers to thousands of largely Victorian and Edwardian terraced properties.
Installation costs are repaid over 25 years out of the savings householders will make from lower gas and electricity bills.
But even after repayments have been made everyone participating in the scheme will still be better off because their annual energy bills will be significantly lower by up to £360 a year, according to the council.
The initial aim is to take 15,000 families out of fuel poverty – a Government definition applied to households where more than 10 per cent of annual income is spent on electricity and gas bills – and to contribute to a target to reduce CO2 emissions across Birmingham by 60 per cent by 2026.
As the scheme grows over the next few years many more low-income families will be helped, according to deputy council leader Paul Tilsley.
Most of the properties were built around the end of the 19th century when cavity walls were not used in construction.
Coun Tilsley (Lib Dem Sheldon) said the cost of insulating such houses was beyond the means of most owners or tenants.
Birmingham was leading the way in innovative green energy schemes and had been praised by the Government, he added.
A letter from the Department of Energy and Climate Change recognises the scale of the Birmingham project and pays tribute to the council’s leadership.
Coun Tilsley added: “Phase three of Birmingham Energy Savers will see 15,000 homes refurbished at a cost of £100 million and create 250 new jobs.”
The average cost of making a house or small business energy efficient is estimated at £6,500.
But the scheme is dependent on the Government’s Green Deal proposals becoming law, enabling local authorities to work with private sector backers to cover the capital cost of refurbishing properties. Cabinet members have backed an outline business case to extend the reach of the Birmingham Energy Savers scheme, with the aim of transforming 200,000 properties by 2026.
Members were told of a “significant appetite” among banks and major finance to participate in the scheme, although the administrative cost of setting up private finance arrangements is likely to exceed £2 million.
The city council will borrow £75 million to help get the project off the ground.
A cabinet report explained how the proposal will work: “In summary, the Green Deal will be a framework set up by the UK Government allowing energy efficiency measures to be extended to property owners or occupiers without paying for these improvements immediately.
“Instead payments for the cost of improvements are recovered in instalments through utility bills over an extended period of 25 years.
“The golden rule forms the basis of this offer in that estimated savings on bills will always equal or exceed the cost of the work.”
Councillor Tim Huxtable (Con Bournville), the cabinet member for regeneration, said Birmingham’s growing reputation for being at the forefront of environmental policy was beginning to pay dividends with more than half of companies seeking to move to the city citing green issues as being important.