04 December 2013

The consequences of ECO cuts

Earlier this week the Government ended months of speculation by announcing reforms to the Energy Company Obligation (ECO).

Energy and climate change secretary Ed Davey revealed ministers’ intention to reduce financial support for some energy efficiency improvements across the country. It also emerged that the time frame in which energy companies need to make these improvements to people’s homes had been extended.

This decision effectively halves the amount of support given to some householders, including those most vulnerable and living in fuel poverty, while potentially delaying the action which will help bring down the cost of energy bills.

Prior to this decision, last week, I wrote to the Prime Minister’s energy advisor, Tara Singh outlining my concerns. Officials from the Cabinet Office and Department of Energy and Climate Change were copied in also. This action was supported by colleagues across the industry.

Solid Wall Insulation has a key and fundamental role to play in reducing energy bills, in some cases by up to 50%, and tackling fuel poverty. In our experience the majority of on-going ECO carbon emission reduction obligationprojects, are being delivered to low income, fuel poor households, in partnership with local authorities and social housing providers.

There is also significant evidence within the industry of a shift in the 'able to pay' market, where homeowners are starting to appreciate the benefits of solid wall insulation and are more willing to make personal investments in their property.

Only last month, the Local Government Association (LGA) warned that energy companies were sitting on more than £1bn which was intended for ECO scheme improvements. It is no secret that energy providers do not like this scheme. The LGA called on government to step up the pace of installations stating the obligation energy firms have to invest in these projects “swiftly and effectively” in order to deliver upgrades to keep the vulnerable warm and healthy this winter.

Unfortunately this advice was not heeded. And the result will be dire for the industry which was working with local government in order to deliver these improvements for residents in communities across the country.

Tim Deathridge, managing director of leading external insulation manufacturer, Sto

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