Last edited 19 Jun 2018

Energy Company Obligation consultation

On 30 March 2018, the government launched two consultations, one into the Energy Company Obligation (ECO) and a second considering changes to the Warm Home Discount.

The Energy Company Obligation is an energy efficiency scheme intended to tackle fuel poverty and reduce carbon emissions by providing property and heating upgrades. The scheme was launched in 2013, and has funded more than 2.2 million improvements. It places an obligation on larger energy suppliers to deliver heating and energy efficiency measures, split between Affordable Warmth for low income and fuel poor households (which accounts for 70% of the scheme) and the Carbon Emissions Reduction Obligation (the remaining 30%) which is available to all households. The current scheme will end in September 2018.

The proposals suggest re-focusing the scheme entirely on low-income and vulnerable households, cutting bills until at least 2028. This is part of the government’s Clean Growth Strategy to bring 2.5 million fuel poor homes up to an Energy Performance Certificate rating of C by 2030.

The refocused scheme also includes proposals to support innovation in the sector. Suppliers will be able to allocate up to 20% of their delivery target to supporting innovative measures. This could see up to £128 million being spent on innovation.

The Warm Homes Discount provides a contribution towards the energy bills of the most vulnerable people. The plans would extend the discount, ensuring that more than 2 million low income and vulnerable customers get £140 off their energy bills next winter.

Energy and Clean Growth Minister Claire Perry said:

“The proposed changes to focus 100% of the ECO scheme on the fuel poor would see energy saving improvements like insulation and modern efficient heating systems installed in 900,000 homes by March 2022. The government also committed to maintaining funding for home energy efficiency until at least 2028 as part of the Clean Growth Strategy, a total of just over £6 billion.”

“As set out in our Clean Growth Strategy, we also want to continue to drive world-leading British innovation in green technologies for the benefit all consumers. That’s why we are increasing the opportunity for energy suppliers to get funding to develop new and innovative energy saving product and services....”