Sunny days could be money spinners

The party foresees a time when people will be able to power up their own houses and then use two-way meters to divert any excess energy.

The Lib Dems would also cut VAT on energy-saving products from 17.5% to 5%.

Quite simply people are dying because they cannot stay warm Andrew Stunell

Energy spokesman Andrew Stunell said the party's new policies - which are uncosted - would give people "a real incentive to save energy in their homes".

"They will pay less for energy-saving products, save money on heating bills and even be able to sell electricity back to power companies if they produce more energy than they can use," he said.

"Labour's record on fuel poverty is shameful - there are 35,000 winter deaths in England every year.

"Quite simply people are dying because they cannot stay warm. This is a shocking indictment of past governments of all parties."

Grants

Under the title "Conserving the Future", the Lib Dem plans would offer pensioner households a subsidised package of energy-saving measures as an alternative to the annual winter fuel bonus.

"The retail value of the package would be higher than the cash bonus, with the advantage of actually making their homes permanently warmer, with long-term savings on fuel bills year after year," said Mr Stunell.

Pensioners would be offered subsidised energy saving measures

The Lib Dems would press the EU to introduce zero-rated VAT on all energy-saving materials.

Manufacturers would have to declare how energy efficient their products were.

All new or replacement electricity meters would need to be capable of two-way operation so energy could be sold back to power companies.

Grants would be offered to homeowners installing innovative energy-saving products

The Lib Dems would also set up a Department of Environment, Energy and Transport, and include a sustainable energy policy unit to coordinate the government's work.

The plans will be presented to the party's annual conference at Brighton in September.