The Carbon Emissions Reduction Target (CERT) funding is designed to help eradicate fuel poverty and help older people, who often struggle to heat their homes, benefit from lower energy bills.
The funding will allow renewable energy specialists, Ecoliving, to provide grants towards ground source heat pumps which use free renewable energy from the ground.
This can help the average household save 60% - 75% of heating energy used each year, saving around £700 on current fuel costs, as well as reducing the carbon footprint of homes.
Energy suppliers are obligated to provide CERT funding to achieve targets for promoting reductions in carbon emissions in the household sector. CERT runs from 2008 to 2011 with at least 40% of funding designated for priority groups which includes the over 70s.
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The majority of Ecoliving's funding is to be used to support the social housing sector with the balance being made available for private households. CERT funding can be used in support of ground source heat pump installations in a variety of domestic developments as part of heating upgrade programmes.
Mark Henderson, Managing Director of Ecoliving, said: "There is growing demand for renewable heating systems and this funding will allow us to support Housing Associations in their fight against fuel poverty with large numbers of individuals finding it increasingly difficult to keep their homes warm.
"We have been actively involved in the social housing sector for the last four years, promoting the adoption of heat pumps in the battle against fuel poverty and carbon reduction. We are delighted to be able to bring CERT funding through Scottish and Southern Energy to existing and new Registered Social Landlord (RSL) partners.
"This is a significant boost to the adoption of tried and tested heat pump technology in social housing and will help to lift many households across Scotland out of fuel poverty."
Ecoliving was a preferred supplier on the Scottish Government's Renewables Heating Pilot, managed by the Energy Saving Trust. Through the initiative, ground and air source heat pumps as well as biomass boilers were installed in over 50 homes in clusters across Scotland in 2007.
CERT will deliver overall lifetime carbon dioxide savings of 154 MtCO2 - equivalent to annual net savings of 4.2MtCO2 by 2010, and equivalent to the emissions from 700,000 homes each year - and will stimulate about £2.8bn of investment by energy suppliers in carbon reduction measures.
(GK/JM)
