Energy-saving cash is in short supply: Limited resources for pounds 200 boiler grants

HOUSEHOLDERS can apply for a pounds 200 subsidy towards the cost of installing an efficient money-saving central heating boiler - if they hurry.

The grant scheme is intended to promote energy saving and reduce air pollution but is likely to run out of money in a few weeks. More than 1 million gas-fired central heating boilers are installed in British homes each year. The pounds 1m earmarked for the grants is enough for only 5,000 installations; less than 1 per cent of the number of potential applicants per year.

The pounds 200 subsidy is for owner-occupied households buying condensing boilers. These burn 10 per cent less gas than the most efficient conventional boilers and 30 per cent less than older boilers. In the Netherlands they account for 40 per cent of sales but in Britain have won less than half of 1 per cent of the market, despite being available for eight years.

The reluctance of installers to use what many consider to be new-fangled, unreliable technology is one reason. More significant is the cost - about pounds 400 more to buy and install than a conventional boiler. Even so, a condensing boiler should pay off the extra in fuel savings within five years and thereafter the owner will be in profit.

By reducing the extra cost to about pounds 200, the subsidy should reduce the pay-off period to as little as 18 months, after which the householder will make handsome savings.

The scheme is funded by British Gas, which is allowed to pass on the cost to customers as a whole. It has been organised by the Energy Savings Trust, a quango run on money raised mostly by the energy utilities.

The trust promotes energy saving in homes to help curb emissions of carbon dioxide - the most important greenhouse effect gas - and other air pollutants. The subsidy for condensing boilers is its first scheme.

Eoin Lees, the trust's chief officer, said he hoped that as sales of condensing boilers took off, the few British manufacturers would cut prices.

Details are available from British Gas showrooms and on 0345 581158.

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