It will give people the opportunity to transform their homes by paying for energy efficient home improvements such as insulation and heating systems with the savings on their energy bills.

Ministers claim the scheme will help thousands of homes stay warm for less.

Deputy Prime Minister Nick Clegg said: “People will benefit from energy saving improvements – and their energy bills will fall. The UK green sector is a success story – it is the sixth largest in the world and has a crucial part to play in building a strong economy. The Green Deal will support thousands of jobs – not just over the next few years, but in the long-term.”

Meanwhile, Energy and Climate Change Minister Greg Barker said:

“The Green Deal will transform the energy efficiency market and puts consumers in charge. It’s a fantastic new scheme that will allow people to make their homes warmer and save energy at the same time.

“And it’s not just consumers who will benefit. The Green Deal is also great for business, creating a new market and new jobs. I’m truly excited about the potential the Green Deal has to transform Britain’s buildings.”

However, Alan Milstein, chairman of the Residential Property Surveyors Association, said: “For many consumers, taking on a Green Deal loan may not be the most cost-effective mechanism to fund any green improvements to their property. With early repayment penalties and the uncertainty surrounding how having a Green Deal loan attached to your property will impact on the future saleability of the property, for many homeowners it may be advisable to look at alternative ways to fund any energy efficiency measures, which they plan to introduce.”

For more information, see our Guide to the Green Deal here.