Energy efficiency: revealing the value

Categories: Articles | Blog

By Samantha Crichton

Government has announced that the changes to the Energy Company Obligation (ECO) have come into force[1]. The changes will help to ensure that the scheme targets vulnerable households. The amendments extend ECO2 from 1st April 2017 to 30th September 2018 to enable reforms to be introduced whilst also allowing industry time to adjust before further changes are made through a longer term scheme (ECO3) that will run from 2018 to 2022.

The reforms were consulted on last year, and the Sustainable Energy Association submitted a detailed response. We were one of the many organisations who supported the Government’s proposal to have an increased focus on low income and vulnerable homes as part of the plan to improve the energy efficiency of 1 million homes by 2020 and endorsed the role of local authorities in identifying vulnerable or fuel poor households. The new regulations mean that local authorities now play a key role in bringing forward people in fuel poverty who require treatments. This move should make it easier for energy suppliers to deliver measures to vulnerable people, making their homes healthier and cheaper to heat.

The other main changes to note are:

  • The ECO extension will now run for 18 months instead of the originally proposed 12 month period
  • The Affordable Warmth Obligation will increase to around 4.7 million households and the Carbon Emissions Reduction Obligation (CERO) will decrease as a proportion of the scheme
  • The Carbon Saving Community Obligation (CSCO) will be brought to an end
  • Eligibility under Affordable Warmth will be extended to cover social housing with EPC bands E, F or G
  • The number of qualifying gas boiler replacements will be limited to the equivalent of around 25,000 measures per year
  • Deemed scores will replace the current Standard Assessment Procedure (SAP) methodology.

Our briefing on the changes made to ECO can be found here.

Whilst the changes to ECO mean that vulnerable consumers will continue to benefit from carbon and energy savings, more needs to be done to address other sectors and households who do not fall within the ECO eligibility requirements. A stable policy framework is essential if energy efficiency is to deliver significant reductions in bills and carbon emissions. Previous subsidy schemes have led to an expectation from many that measures should be provided free of charge – this has led to a devaluing of energy efficiency. Energy efficiency brings long term benefits for homes and the people living in them and this should be reflected in the value of the property. We are calling on the Government to introduce a long term plan to bring all homes up to EPC band C over the next 20 years. The Energy Company Obligation will play some part in delivering this objective in the homes of the fuel poor or vulnerable and the proposals made in our paper ‘Energy Efficiency – A Policy Paper’ will bring a market based approach to energy efficiency and lead to the real value of energy efficiency being reflected in property prices.

For further information on the SEA’s energy efficiency proposals, please contact Samantha Crichton

SEA launched a Bill to give the Government a legal duty to ensure that all homes reach EPC band C by 2035. See campaign flyer here.

To support the campaign to bring all homes up to EPC Band C by 2035, please contact Ron Bailey