New ECO Guidance May 22, 2015

A new set of rules has been released by the industry regulator, Ofgem for installers working under the next phase of the Energy Company Obligation (ECO) scheme.

The Guidance, titled ECO2, covers the next obligation period and affects any measures installed and submitted after April 1st 2015 to April 2017.

There are a few major changes that will affect installers, especially those fitting gas heating or loft insulation:

Loft Insulation

Ofgem are tightening down on fraudulent virgin loft insulation claims by introducing a new rule. Loft insulation installers will now need to obtain a signed declaration from the customer proving that no pre-existing insulation was removed prior to the installation.

The declaration will also need to be signed by a DEA, GDA or Charted Surveyor and then pinned up in the loft space ready for any technical monitoring inspections.

The Guidance also suggest that installers take a photograph of the declaration once it has been positioned to prove it was completed should the customer remove it.

This new regulation is a direct response to the latest insulation scandal, were unscrupulous installers have been found to be ripping existing insulation out of loft spaces to claim higher carbon scores from their funders.

Solid Wall Insulation

Now that ‘easy to treat’ insulation (such as cavity wall insulation) have been added as eligible measures in the CERO ECO strand, a new sub obligation has been introduced to ensure that Energy Companies still fund a proportion of solid wall insulation as part of their overall ECO delivery targets.

A total of 4Mt CO2 will be delivered through solid wall insulation installs by the end of March 2017 – this equates to around 100,000 homes.

However, Ofgem have confirmed that under this sub obligation they will not accept any solid wall insulation measures that have been installed on houses with cavity walls. This means that only homes with solid, system built, timber frame or steel frame walls will be eligible properties.

Boiler Warranty

Any boilers installed under ECO must now come with a 1 year warranty which covers the whole heating system. The installer must gather a signed declaration from the customer proving that they have been made aware of the warranty and were not charged extra for it.

HHCRO – Deflator and Uplift

Under the HHCRO ECO strand, funding rates for main gas boiler replacements will now be affected by a cost score point deflator. Any HHCRO funding allocated to these installations will automatically be reduced by 20%. This reduction has been implemented to encourage more off gas heating installations to take place, such as more efficient oil boilers and renewable heat technologies.

Properties that are not connected to mains gas or district heating will benefit from a heat cost score uplift. For insulation the uplift is 35% and for qualifying replacement boilers the uplift is 45% (excluding storage heaters). The uplift has been introduced to encourage more improvements in the most inefficient properties off the gas network.

Electric Storage Heaters

Ofgem have provided guidance on when electric storage heaters would qualify under ECO. A new ‘Qualifying Electric Storage Heater’ can be funded when an old inefficient storage heater is broken down or where a newer storage heater cannot be repaired economically (similar criteria to qualifying gas boilers). In the new guidance the ‘existing heating system’ would default to portable electric room heaters which are significantly more expensive to run, this results in higher cost score points to fund the new electric storage heaters.

Download the full ECO 2 Guidance

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