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EU plans new energy efficiency incentives

Homeowners could get new financial incentives to help them install thermal insulation and improve the overall energy efficiency of their properties under plans outlined by the European Commission.

The executive body of the European Union has issued a new draft strategy, entitled Energy 2020, that aims to map out how its 27 member states can make the transition to a low-carbon economy.

In the document, the commission has pledged to introduce fresh mechanisms to help households invest in improving the energy efficiency of their properties by mid-2011.

It added that cutting unnecessary consumption of gas and electricity is "the most cost-effective way" to reduce costs for consumers, drive growth in green jobs and rein in carbon emissions.

The commission's strategy comes after the British government published its plans for the Green Deal, which will provide loans to cover the upfront cost of upgrading loft insulation and implementing other energy-saving measures.

Under the proposals, households would pay back the money using the resulting savings on their fuel bills.