7 November 2016

  |  CBI Updates Team


The future of household energy efficiency

Following a number of changes and cuts to the household energy efficiency sector, and with the end of the Energy Company Obligation (ECO) in sight, the CBI responded to a recent government consultation to establish an interim ECO scheme. 

The future of household energy efficiency

With the current ECO scheme coming to an end in 2017, the government is working to establish an interim scheme (running 2017-18), before a new long term successor, ECO2 comes into force (2018-2020). The CBI responded to its Help to Heat consultation, welcoming the action being taken to establish an interim scheme, whilst giving clarity on the likely content of future proposals. In its consultation response, the CBI argued that:

  • The increasing focus on providing energy efficiency measures to the fuel poor is welcome, ensuring that those most in need receive the measures ECO seeks to deliver. 
  • A smooth transition will be needed to ensure effective delivery, particularly as the interim scheme will only run for one year. Given the changes to which companies must adapt in order to comply, business is calling on the government to introduce a ‘carry under’ mechanism, whereby unmet targets from the interim scheme could be carried through to its successor.
  • Moves to reduce the administrative burden of ECO are welcome. For example, simplifying targeting through deemed scoring and allowing local authorities to support in the identification of homes in need of energy efficiency measures are seen as positive steps by industry. 
  • It is, however, crucial that any new scheme doesn’t give rise to unintended consequences. To this end, there is some concern around the proposed introduction of caps and minimums on the types of insulation measures eligible for insulation – specifically limiting the numbers of qualifying boilers, as well as setting a minimum for solid wall insulation. This may override the positive steps taken to reduce the administrative burden. 

Looking forward, business and government must continue to work together in order to create a longer term policy outlook that will support consumers and build a sustainable market in household energy efficiency. Industry must also work with government to establish robust policy to stimulate the able-to-pay market, especially in light of the government’s commitments to carbon reduction and subsequently the role household energy efficiency can play in reducing demand on our energy system. The full consultation response can be found here.

For more information, please contact Hannah