ECO

ECO – the Energy Company Obligation – is a new government scheme introduced in October 2012 which replaces the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). ECO is an extension of the existing expectation of energy companies to meet their obligations.

There are three key elements to ECO for the UK’s six big energy suppliers:

•   Carbon Emissions Reduction Obligation
•   Carbon Saving Communities Obligation
•   Home Heating Cost Reduction Obligation (HHCRO)

How does ECO work?

It is likely that ECO will be heavily linked to the Green Deal and will particularly support those householders (eg the poorest and most vulnerable) and those types of property (eg hard to treat) which cannot achieve financial savings without an additional or different measure of support.

The Affordable Warmth Obligation is central to the Green Deal, which aims to address fuel poverty by including low-income households in receipt of state benefits and hard-to-treat homes.

ECO funding is available from 2013 through three different elements:

•   Carbon Emissions Reduction Obligation (CERO)
Aimed especially at hard-to-treat households, receiving 60% of ECO funding.

•   Carbon Saving Community Obligation (CSCO)
For the lowest 15% income areas across England, Scotland and Wales, receives 15% of ECO funding.

•   Home Heating Cost Reduction Obligation (HHCRO)
Targeting the private sector’s most vulnerable homes, receives 25% of ECO funding.

Where will the funding go?

•   Carbon Emissions Reduction Obligation (CERO)
Funding is available for solid wall insulation (SWI) and hard-to-treat cavity wall insulation (HTT).

•   Carbon Saving Community Obligation (CSCO)
Funds solid wall and cavity wall insulation, loft insulation, district heating and glazing.
There is no requirement for qualifying benefits in CSCO areas, irrespective of tenure. 20% of funding is earmarked for areas adjacent to Lower Super Output Areas.

•    CSCO Rural
15% of CSCO funding is allocated to rural areas (populations of under 10,000). Funding is available to those on income-related employment support, state pension credit, working tax credit (household income below £15,860) and child tax credit (household income below £15,860). Measures include cavity wall insulation, external wall insulation, loft insulation, replacement boilers and glazing.

• Home Heating Cost Reduction Obligation (HHCRO)
Provides energy bill savings for those on qualifying benefits (as per CSCO Rural) and is applicable to any heating/insulation measures that can reduce the property’s heating cost.

Although much of ECO is targeted at solid wall insulation, as the government firms up the Green Deal it is becoming clear that support will be given for broader measures, including hard-to-treat cavity walls. Where solid-wall or hard-to-treat cavity insulation is being installed, other measures can be used alongside to reduce heat loss, for example, glazing and draught proofing.

Publications:
October 2012 – DECC – Get Help to Keep Your Home Warm