What will the Energy Company Obligations (ECO) scheme look like in 2017?
What will the Energy Company Obligations (ECO) scheme look like in 2017? Dec 21, 2016
The Government is currently analysing the industry’s feedback on their consultation regarding a transitional year for ECO.
They have proposed that an interim scheme, dubbed ‘ECO Help to Heat’, is introduced in April 2017 to provide enough time for policy makers to design a new energy efficiency programme to launch in 2018.
Although the Government have yet to publish their consultation response, it is looking very likely that the following changes to ECO will be implemented:
A new deemed scoring system will be introduced providing a set funding allocation per property type and measure (e.g. Life Time Savings Score or Carbon Tonnes Score). This will eliminate the requirement of creating EPCs to calculate funding levels.
HHCRO will become the transitional scheme’s primary obligation taking the lion’s share of the budget. HHCRO is the sub obligation that has been established to support vulnerable residents. CERO will be cut back and CSCO will be axed altogether.
HHCRO will focus on low cost insulation (cavity wall insulation, loft insulation) as well as off gas heating measures (Oil / LPG boilers).
Social Housing will be included in HHCRO for the first time but limited to insulation measures and first time central heating systems. Houses much have an EPC rating of E, F or G.
Local Authorities can refer residents for HHCRO funding regardless of their benefits eligibility, providing that they declare the householders are in fuel poverty or have cold related illnesses. A guide for how Councils can qualify householders will be provided in the New Year.
Qualifying gas boilers (e.g. broken down / inefficient) will be capped at 25,000 installations (down from 120,000). Energy Companies that over deliver on the current ECO scheme will only be able to carry over 23% of its HHCRO target from qualifying boilers.
There will be a small ring-fenced budget for solid wall insulation which could support up to 17,000 homes.
Many in the industry have indicated that the transitional ECO scheme should run for longer than 12 months to help stable the market and give installers a chance to adapt to the new guidelines. There are strong indications that the transitional year will in fact be 18 months.
It is looking likely that the Department for Business, Energy & Industrial Strategy (BEIS) will provide their consultation response in January 2017.