Hot on the heels of the Bonfield Review the Government published its response to the ECO Transition Consultation on the 30th January 2017.
We believe this is a very positive result for the energy efficiency sector. Whilst not all outcomes were implemented, many of the lobbying objectives put forward by stakeholders were achieved.
The headlines of the new scheme are:
- An 18-month scheme to run from the 1st April 2017 to the end of September 2018.
- £960m budget for the 18-month period.
- Split of target
- 70% Affordable Warmth
- 30% CERO with a small sub rural component – 15% of overall CERO target.
- No CSCO
- The size of the Affordable Warmth Group has been increased by 1m homes to 4.7m homes.
- Social Housing in EPC Bands E, F and G added
- Income thresholds increased
- Up to 10% of the Affordable Warmth target can be delivered through Local Authority declarations that a household is fuel poor although not necessarily in the AW qualifying group.
- Boiler installations have been restricted to 25,000 installs to ensure the focus is placed on insulation.
- The Solid Wall Insulation Minima has been increased by 25% with 32,000 installs in the 18-month period.
- The CERO target has been increased by some 60% compared to the consultation representing 7.3m tonnes over the 18-month period.
- The scheme has been simplified with the introduction of deemed scores and removal of GDARs.
Stakeholder Lobbying Objectives and Outcome:
1.Focus on insulation – achieved.
- Boilers restricted to 25,000 per year meaning an insulation minima of some 75%
2.Increase the length of the obligation from 12 months to 18 months – achieved.
3.Increase the size of the overall target by providing evidence that BEIS assumed costs of delivery were too high and assumed 3rd party contributions too low – achieved.
- CERO target has been increased by
- SWI minima has been increased by 25%
4.Demonstrate that Solid Wall Insulation can be delivered cost effectively so that it was included as a qualifying measure – achieved.
- Inclusion of EPC bands E, F, G social housing.
- Inclusion of mixed tenure in HHCRO.
5.Secure a SWI minima and increase in the size of the 17,000 per year SWI minima that BEIS proposed in its consultation – achieved.
- The minima has been increased by 25% to 21,000 per year which equates to 32,000 over the 18-month scheme.
6.Increase the number of Qualifying Affordable Warmth Households and provide some flexibility to treat fuel poor households who do not meet the qualifying criteria – achieved.
- The number of qualifying households has been increased by 1m to 4.7m.
- 10% of the target can be achieved through the Local Authority Flexibility Option.
7.Simplify the scheme administration – achieved.
- Introduction of deemed scores.
- Removal of the need for GDARs.
8.Extend the lead in time for installers to comply fully with the new PAS2030 past 1st April 2017 – achieved.
- Installers will have until end May 2017 to comply with the new PAS2030.
9.Adjust the deemed scores to reflect the fact that carbon will be carried over at inflated scores from the current ECO – achieved.
The outcome of the consultation will have a major impact on helping:
Over 4 million UK households estimated to be living in fuel poverty, unable to afford to live in a warm, dry home. Fuel poverty is causing misery, ill health and premature death in households across the UK.
High energy prices, dwindling household incomes and abysmally low standards of domestic energy efficiency all contribute to the cold homes crisis. Right now, people are facing difficult choices about whether to heat their homes and forgo another household necessity such as food, or spending what they need to keep warm and avoid falling into debt.
The key to tackling this problem is improving the energy efficiency of our housing that sees our poorest households spending £1 billion more a year on energy compared to non-fuel poor households. We also need to improve the quality of access to energy advice and services and ensure that all households are able to engage in the competitive energy market.
The UK’s leading fuel poverty charity National Energy Action (NEA) estimates that in the next 15 years the cumulative effect of living in cold homes will result in £950m of fuel debt which will not be spent in local economies and £22 billion spent by the NHS in treating cold-related conditions.
The implantation of this consultation from April 2017 will be a major step forward in combatting the effects of fuel poverty.
We will be in attendance at the National Insulation Associations members briefing on the new ECO in March 2017.
The full BEIS response to the Energy Company Obligation (ECO): Help to Heat Consultation can be found here https://www.gov.uk/government/consultations/energy-company-obligation-eco-help-to-heat