Following the success of the car scrappage scheme, Chancellor Alistair Darling has announced the launch of a boiler scrappage scheme to help 125,000 households replace outdated and inefficient heating systems.
Each inefficient boiler, he said in his pre-Budget report, adds £200 to household bills and one tonne of carbon to the atmosphere each year. Households with working G-rated boilers will be offered £400 towards the cost of a new boiler or renewable heat unit.
If your boiler is more than 15 years old, it is likely to be G-rated. You can find out more about your boiler's rating on the Energy Saving Trust website.
The plan forms part of a commitment to spend an additional £200 million on improving energy efficiency.
The Warm Front scheme, which helps those on low incomes to improve the energy efficiency of their homes through better insulation and heating improvements, will also be extended to help a further 75,000 households.
According to Will Marples, energy expert at uSwitch.com, heating and hot water account for over 60% of the average household energy bill.
"In total, people can expect to pay £1,239 a year on energy - heating and hot water accounts for £756 of this so it makes absolute sense to focus energy efficiency efforts here where people have the most to gain," he adds. "However, for many families and households the cost of buying one and having it installed is prohibitive."
However, Marples says more details are needed on the scheme: "We’d like to see poorer families and vulnerable groups able to benefit from the scrappage scheme as well as existing grants and not be pushed to choose one or the other.”
Darling also confirmed that tax incentives will be offered to those households embracing renewable energy. People with either wind turbines or solar panels who plug excess power back into the National Grid will receive tax-free payments averaging £900 a year.
Meanwhile, in a bid to increase the number of electric vehicles on our roads, the chancellor announced plans to make company cars exempt from tax for five years. There will also be a 100% first-year capital allowance for electric vans.