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The real effect of ECO

The real effect of ECO

Controversy and confusion have surrounded the Green Deal and the Energy Company Obligation (ECO) – the Government's flagship domestic energy efficiency schemes – even before they were launched with the 2011 Energy Act.The Green Deal has struggled to take off and ECO has failed to deliver the kind of large-scale improvements seen under CERT and CESP.In March this year, even the Government Minister in charge, Ed Davey, called the Green Deal sign-up figures “disappointing”. And changes to ECO – as announced last year by the Prime Minister and seen by critics as watering down the obligation – are currently under consultation.Yet the latest figures for both schemes show positive signs of improvement –the number of Green Deal plans has risen each month this year (up by 22% from March to April) and ECO saw it’s highest ever figure of installations (up by 25% from February to March).ECO is in fact split into three strands of funding:

  • Carbon Emission Reduction Obligation (CERO) – originally focused on hard-to-treat cavity wall insulation and solid wall insulation.
  • Carbon Saving Communities Obligation (CSCO) – providing low-income areas (with a separate target for rural areas) with mainly insulation.
  • ­Home Heating Cost Reduction Obligation (HHCRO) – providing energy efficiency measures, including boiler repairs or replacements, but only for people on certain benefits in private properties.

Perhaps there is a simple explanation for the record rise for the ECO – energy companies have focused first on properties that are cheapest and easiest to treat. So now they are being more selective about which strands they are willing to fund. Housing Associations with urban portfolios and, therefore, lots of hard-to-treat properties, are struggling to get ECO funding because of a focus on lower cost measures as opposed to truly assisting the fuel poor. And the state aid cap attached to the Green Deal Home Improvement Fund will put a stop to large-scale plans for social housing, which make measures too expensive.But Matt Lucas, Director of Mears Energy, says it is important to remember that ECO targets remain, the funding must be spent and the benefits to clients and customers are very real.Matt says: “We’ve recently completed a project in County Durham to install external and internal wall insulation and render under the ECO, in partnership with Livin Housing.“It’s helped to regenerate the community, by providing more attractive and thermally efficient properties, and will greatly aid in meeting building regulations and legislation for energy efficiency and reduction of carbon emissions.“And it’s had a real impact on the residents –one lady, recovering from illness, has already told us her heating bills have dropped from £30 to £15 a week.”Matt says that when talking to social clients about prospective jobs, the first question they ask is ‘How much will it cost?’ But the second question is ‘How much ECO funding can be provided?’“What we are seeing in the market is that ECO is seen as a bonus for social housing building projects that would go ahead anyway –but ECO allows budgets to stretch further, therefore allowing more households to receive assistance – many of whom are vulnerable and in fuel poverty“Building projects need long-term planning and the uncertainty surrounding ECO doesn’t help that. Our biggest job is to use our market intelligence, our understanding of Government policy, and the close relationships we have with utility companies to help clients make the most of ECO and additional funding streams to make the most of their budget.”

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