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Solid wall insulation to suffer under proposed changes to ECO

Posted by Tasha Kosviner on 7 March 2014 at 11:36 am

PEOPLE on low incomes will still be eligible for free loft and cavity wall insulation under the government’s proposed changes to the energy company obligation (ECO), announced this week.

However, it will be harder for those not on low incomes who live in solid-walled or hard to treat homes to access free insulation.

Those are the key changes contained in the government’s consultation paper on ECO which energy and climate change minister Ed Davey (right) launched at the Ecobuild conference in London this week.

As expected, the consultation also proposes extending the deadline for ECO from 2015 to 2017, meaning energy companies have longer to fulfil roughly the same obligations.

The changes have been made in response to last year’s energy price hikes which the big six energy companies blamed on the so-called green levies, of which ECO is one.

Under ECO, launched in 2013, energy companies were given targets to fund improvements to the energy efficiency of UK homes. If they fail to meet targets they face being fined. The energy companies agreed to the scheme but then raised energy prices by between 9 and 11 per cent in order to pay for them.

The primary change to ECO will be a 33 per cent reduction in the carbon emission reduction obligation (CERO) part of the scheme bringing the amount of carbon dioxide the industry must save by March 2015 down from 20.9 million tonnes to 14 million tonnes. CERO has also been opened up so that the target can be met with installations of loft insulation – previously it was restricted to the more expensive solid wall insulation.

The other two parts of ECO, the carbon saving communities obligation and the affordable warmth obligation, are also subject some small changes, although the number of people who are set to benefit from both of these schemes will remain unchanged. These are the obligations that target low income and rural communities and individuals and include the headline grabbing free gas boiler replacements, 165,000 of which have already been made under ECO to date.

The consultation document highlights concerns about the quality of the free gas boiler replacements made under the scheme and the proposals include a plan to introduce better warranty terms for such installations. The scheme may also be extended to include electric storage heaters under the definition of boilers meaning those who live in homes off the gas grid may also be able to benefit.

But while the news isn’t great for those in privately owned, solid walled homes, the measures will be welcomed by those in the energy saving sector who have suffered from a boom and bust situation because of the deadlines imposed under ECO.

Speaking at the launch, Mr Davey said: “We recognise that near term targets create long term uncertainty and can result in surges of activity followed by lulls as the market adjusts.”

He said the new deadlines gave “a three year line of sight for business planning”.

Another effect of the extended deadline is the chance to include more connections to district heating networks which may still be in planning stages, into the scheme.

The consultation, which can be read in full on the department of energy and climate change website, will run until 16 April 2014.

More information

YouGen guide to ECO

Are there really free gas boilers available?

If you have a question about anything in the above blog, please ask it in the comments section below.

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