LED light bulbs are set to become a more prominent feature in households across the UK as the government launches a new initiative to cut winter fuel bills.

Energy secretary Edward Davey introduced the £40 million competition designed to drive local programmes for keeping homes warm and energy bills low.

"With prices rising and temperatures dropping, we want to make sure we are doing all we can to help vulnerable householders keep warm this winter," he explained.

"This funding will put local councils at the heart of action to get energy bills down, for instance helping low income householders upgrade old inefficient heating systems and insulate draughty homes."

The cash injection is broken down into three separate components, with £25 million being made available to councils to improve the thermal efficiency of local homes, £10 million for pioneering Green Deal projects and £5 million for the Cheaper Energy Together programme that aims to set up collective switching schemes so that consumers can get better deals from energy suppliers.

"As well as helping even more councils showcase the benefits of energy efficiency, this funding will support the launch of initiatives to enable local residents to save money by clubbing together to get a better energy deal," added the minister.

Meanwhile, thousands of LED lights could be installed in a Welsh community as part of plans to reduce council spending on inefficient lighting, the BBC reported. Powys council turned off some 4,770 street lamps in 2008 to save money and now believes replacing them with low energy LED bulbs could prove to be the ideal solution.

The cost of the programme is forecast to be in the region of £1.4 million, but this would be recouped via lower energy bills, the reduced cost of maintenance and the longer life expectancy of the 14,000 new bulbs.

A report by the council commented: "The project proposes to adopt this evolving technology as the main option to reduce the council's overall energy consumption whilst providing appropriate levels of street lighting to benefit Powys residents and road users."