The insulation grants are part of the £1bn Eco+ scheme which will run from spring 2023 until March 2026.

It has been launched today for households who don’t receive any other support from government-backed energy efficiency schemes.

The money will be available to help people to upgrade their homes making them more energy efficient which in turn will reduce their bills.

It comes as Ofgem published its latest price cap for January, which would have seen bills rise to £4,279.

This is the amount households would be paying on average if the government had not introduced the Energy Price Guarantee. It caps bills at £2,500 and it was confirmed in the recent Autumn Statement that it will rise to £3,000 from April and run for 12 months.

Business and energy secretary, Grant Shapps, said: “Today, we launch the first of many measures to ensure the British public are never put in this position again as we work towards an energy independent future.

“A new ECO scheme will enable thousands more to insulate their homes, protecting the pounds in their pockets, and creating jobs across the country.”

More financial support needed for vulnerable households

Energy charities have welcomed the move but say it does not go far enough.

Gillian Cooper, head of energy policy for Citizens Advice, said: “Additional funding for energy efficiency measures is welcome. People also need clear, consistent advice on how to safely reduce their energy use. We look forward to seeing how the government will ensure everyone has the information they need to do this.

“But this is only part of the solution to the financial pressures people are facing. Some we’re helping are making desperate choices to keep bills down – like turning the heating off despite having a health condition which means they need to keep warm.

“An energy saving campaign has to go hand-in-hand with continued financial support for people at the sharp end of this crisis.”

Adam Scorer, chief executive of National Energy Action, said the scheme does not reach the most vulnerable households.

He said: “We believe government focus should be on the worst first, helping people in the greatest risk, the greatest jeopardy, more of this money should be going to help them.”

Who is eligible for ECO+?

Around 80% of the money from the scheme will be given to people living in some of the least energy-efficient homes. These homes will have an Energy Performance Certificate rating of D or below and be in a lower council tax band.

A fifth of the money will go towards the most vulnerable households, including people receiving means tested benefits or those in fuel poverty.

What will households get from ECO+?

Households will be able to apply for grants for low-cost insulation measures such as loft and cavity wall insulation.

These measures are expected to save households an average of £310 a year.

This will also help the government’s goal of reducing energy consumption from buildings and industry by 15% by 2030.

Who can benefit from ECO+?

The existing Energy Company Obligation (ECO) scheme, which was launched in 2013, is targeted at those who need support most such as those in social housing, on a low-income or fuel poor.

But ECO+ has been launched for anyone who is not eligible for government-backed support for upgrading their homes.

More details about how to apply are expected to be published soon. However, it’s likely customers will need to contact their energy provider to find out what is available and how to apply. If eligible, providers will conduct a property survey and pay for any work completed.

When will the help start?

A consultation has been launched for Eco+ which is expected to launch in spring 2023 and run until March 2026.

The government said it is in talks with energy providers about starting some of the support before the spring launch.

What other support is available?

The new scheme will run alongside the government’s ‘Help to Heat’ programme, which was launched in September. It is in place to help 130,000 people living in social housing and low-income properties in England and promises to cut their energy bills by up to £700 a year.

An £18 million public information campaign is also being launched offering tips and advice for households to cut their energy use without harming their health.

These include reducing the boiler flow temperature from 75C to 60C, turning down radiators in empty rooms, and draught proofing windows and doors.

On Friday, YourMoney.com reported that the government is also expected to announce a programme which will give middle-earning households a grant of up to £15,000 grant to retrofit their homes.