The Green Deal Scheme is aimed to encourage millions of households to take out loans to improve the efficiency of their existing residences, by installing insulation or new boiler, with the loans paid pack in installments on their energy bills.

Households carrying out energy efficiency improvements on their home can now get more money back to offset the cost of having the work done.

Home owners will get a second chance to take advantage of the Green Deal Home Improvement Scheme.

The Government will offer an extra £100m in subsidies for those who want to insulate their property or make other improvements that will improve energy efficiency and reduce their bills, the energy secretary has announced.

The Home Improvement Scheme was an additional element of the wider Green Deal programme, which has proved far more popular than the parent scheme.

Ed Davey made the announcement at the Liberal Democrat conference in Glasgow, although it is unclear if the same level of cashback benefits as before will be on offer.

He also outlined the party’s intention to encourage smaller firms to take 30pc of the energy market by 2020 in order to break up the dominance of the Big Six companies. The previous mentioned policy of of a £100-a-year Government-funded council tax discount over the next 10 years for those who improve the energy efficiency of their homes will also be confirmed.

He is expected to tell the conference today: “I’m proud that energy independents are supplying nearly eight times as many people as they were under Labour. And I want to see their market share grow more – to 30pc or more by the end of the decade. That will mean lower energy bills and better customer service for people across Britain.

“And if we couple this radical shift to smaller suppliers with a step-change on energy efficiency, not only will we see lower energy bills, but we will dramatically cut fuel poverty, reversing Labour’s failure there too.”

New entrants are beginning to gain ground. First Utility recently passed 500,000 customers, equating to 1m accounts and OVO Energy has nearly 400,000 customers.

What is the Green Deal?

The Green Deal, launched at the start of 2013, was billed by ministers as heralding a “revolution” in upgrading Britain’s old and draughty housing stock.

The scheme aimed to encourage millions of households to take out loans to fund the cost of work such as installing insulation or new boilers, with the loans paid back in instalments on their energy bills over 10 to 25 years.

It was marketed around the idea that the household would end up better off, because the repayments would be lower than savings the household enjoyed from being more energy efficient.

Has it worked?

At the start, demand was pitiful. High interest rates on loans widely regarded as unattractive and ministers forced to admit that savings were not guaranteed. The loans also stayed with the property, leaving some doubt for those planning to sell their homes.

Homeowners were unimpressed with the assessment fee, as they must pay around £120 just to find out what measures they could install. Interest rates on Green Deal plans also look high. The best deal on a regular personal loan from a bank or other lender fell to 4.3pc recently, while Green Deal finance is about 7pc, fixed for the term of the loan.

Fewer than 4,000 households had signed up for ‘Green Deals’ after the first seven months.

To sweeten, the deal a £125m cashback scheme was added in December with increased pay-outs on offer.

Green Deal Home Improvment Fund

But it was the addition a of a new element to the scheme in June that was the game changer – the Green Deal Home Improvement Fund.

Householders were then able to claim up to £1,000 to install two energy saving improvements, with an additional £100 towards the assessment cost and an extra £500 for people who have bought their home in the past year. This could cover the entire cost of some measures, such as £500 for cavity wall insulation and £1,000 for two energy-efficient doors.

There was also up to £6,000 on offer for households that install solid-wall insulation.

Crucially, you did not have to take out a Green Deal loan to get energy-saving measures installed and claim cashback. However, the work had to be done by a registered Green Deal provider.

The measures being installed also needed to have been recommended in a Green Deal assessment or on your Energy Performance Certificate (EPC) within the past two years.

Here, we ran through two Green Deal scenarios, to see if you would benefit.

The demand was huge and the scheme closed abruptly on July 24 [Was the Green Deal scheme rigged?].

The verdict:

MPs called the scheme overhaul a “disappointing failure”, with flawed planning and poor implementation leaving consumers frustrated and confused.

The Energy and Climate Change select committee said homeowners should be offered new incentives such as discounts on stamp duty or council tax in return for carrying out work to improve the energy efficiency of their homes.

When will the third Green Deal launch?

The Department for Energy and Climate Change said details will be published in late November on when households can apply and the benefits that will be offered.

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