Oil boiler support under the Energy Company Obligation (ECO)

Executive summary

BEIS are committed to decarbonisation as well as tackling the cost of energy in order to reduce fuel poverty. Reducing emissions from buildings is challenging, but necessary if the UK is to meet its long-term climate change targets.

1,742 ‘non-gas’ boiler replacements have been made under ECO2t in the first 8 weeks of the scheme. SEA member market intelligence, and the scheme’s deemed scores suggests that the vast majority of these are likely to be oil boilers.

Extrapolating this deployment rate forward, at least 15,700 oil boilers could be installed over the 18-month ECO2t scheme. These are incentivised by the gas boiler deployment cap, and relatively attractive oil boiler deemed scores.

Government policy supports both the installation of oil boilers under ECO2t, and the replacement of fossil fuel heating systems with renewable technologies under the domestic RHI. In practice, current financial grants for oil boilers makes decarbonising heat in the UK more expensive (by ~40%-100% against current domestic RHI subsidies).

The SEA calls on BEIS and Ofgem to restrict oil boiler eligibility under ECO3 by better promotion of and support for low-carbon heating technologies potentially by linking the RHI and ECO; providing an uplift in scores for these technologies; encourage the improvement of standards; and support low-carbon heating supply chains.