The last few weeks have been something of a whirlwind for energy efficiency, with announcements coming almost every day – mainly telling us what will not now happen, rather than what will. Reference has been made to the Energy Company Obligation ‘continuing to provide support’, but, pointedly, adding ‘this year’. What is almost certain is that ECO will not remain in its current form.
| “Six months was spent when ECO was first introduced understanding the procedures and assessing the viability of the funding. This work was essentially abortive when the ECO obligation was dramatically reduced....Any new scheme will require greater simplicity and lighter regulation to promote wider uptake.” |
As with the Green Deal, ECO has come in for heavy criticism. The changes of 2022 had a disproportionately large impact on social landlords, who are often further along the curve in terms of the types of measures they have undertaken. The changes turned off the tap on many solid wall insulation schemes – amongst the most costly to carry out, but also one of the measures that have the biggest impact on energy use and bills – rendering them unviable.
| “Painfully complicated. Not at all happy with the energy companies insisting they themselves project manage the works or even deliver them via subsidiaries.” |
Having asked SHIFT landlords for their views, it is clear that, even putting last year’s changes to one side, many have found its operation frustrating and distortive. A large amount of resource needed to be spent on getting to grips with how it worked, and ‘matching up’ energy companies with projects was also time-consuming. This appears to have had two consequences.
Firstly, rather than being topped up to get them over the line, projects have often been fully funded by the obligation without help from landlords or third party funders – great if you are the lucky recipient, but not a very equitable or efficient use of money. Secondly, to ensure that schemes came to fruition and were not rendered unviable in an uncertain funding environment, projects are frequently planned without factoring in external funding. This means that external investment designed to drive decision-making towards energy efficiency can be, in effect, ‘wasted’. In short, for many landlords, ECO has been bureaucratic, cumbersome and a poor use of resources.
| “It was great whilst it lasted, and for the limited range of measures we used it for. There are missing measures that would be of enormous help in tackling fuel poverty.” |
So there is appetite for change. The current obligation ends in 2017, and energy companies are gearing up to discharge the majority of their commitments by the end of 2016.
There are still over 7.7m solid wall homes that need improving and over 2.3m households in fuel poverty. We need to be thinking seriously now about what should come after.
There is broad consensus that its successor should:
- Be taken out of the hands of the energy companies – social landlords, local authorities and community groups could be best-placed to determine where investment is most needed;
- Target low-income areas at risk of fuel poverty – to help people who already contribute a disproportionate amount through green levies;
- Adopt an ‘area-based’ approach – so that economies of scale can be maximised and resources used more efficiently.
| “ECO as it currently stands is of no use where our homes are...we no longer consider it.” |
What do you think? What have been your experiences of ECO? What do you think could improve the way retrofit programs are funded?
Our thanks to some of the organisations involved in SHIFT
