A FLAGSHIP Government policy designed to slash household energy bills has been launched today.

The Department of Energy and Climate Change unveiled details of its Green Deal.

Residents can install hundreds of pounds worth of energy saving measures such as cavity wall insulation or window double-glazing without paying upfront.

Instead, initial costs are covered by a loan from the Government-backed Green Deal Finance Company.

Loan repayments are then added to the cost of a householder's electricity bill with an interest rate of 6.9 per cent.

The Green Deal hinges on a “golden rule” which is that repayments are lower than the amount saved from using less gas, electricity, or oil to power a home.

Secretary of State for energy and climate change Edward Davey said: “More and more families are being hit by the rising cost of fuel bills and the best way people can protect themselves from increased costs is to use less energy.

“This is where the Green Deal comes in, giving people a new way to pay for energy saving home improvements.”

There are 45 different improvements covered by the Green Deal.

These range from simple measures such as draught proofing and loft insulation to more hi-tech projects of solar panels, small electricity-generating windmills or biomass boilers.

To take part in the scheme, a home is first reviewed by an accredited assessor.

They will look at what upgrades can be made and over what time period energy savings would cover the cost of the work.

Green Deal Providers then quote for the work and households can get multiple quotes for some or all of the work.

If a resident goes ahead, a Green Deal Installer will carry out the work.

The scheme has been launched on the back of Government statistics which state that UK buildings are among the least efficient in the world.

Buildings create 38 per cent of the country's greenhouse gas emissions.

For more information visit www.gov.uk/green-deal-energy-saving-measures.