Energy Company Obligation

What is the Energy Company Obligation?

There are some cases where the Golden Rule will not work but where there are still important reasons to install energy efficiency measures. The key mechanism to support in these cases will be the Energy Company Obligation (ECO).

ECO
 

ECO will be focussed on:
• the lower income and most vulnerable
• properties needing the next most cost effective measures that do not meet the Golden Rule – for example, solid wall insulation (SWI).

From the outset, the carbon goals targets will only be achieved within a certain householder group (lower income and vulnerable households where Green Deal is less likely to work) and/or with certain property types.

Lower income and vulnerable households 

Households on very low incomes tend to underheat their homes significantly which can pose health problems, particularly for the most vulnerable. ECO will play an important role in supporting the upfront costs of heating and insulation measures for these households. Efficient central heating systems, as well as insulation, are key to helping improve people’s ability to heat their homes, bringing a variety of benefits. Introducing a new ‘affordable warmth’ target will also help in situations where Green Deal finance, will not be sufficient to make sure that households can benefit from the Green Deal. The main objective is to help householders heat their homes not save on their fuel bills.

Cost effective measures

The Green Deal finances energy efficiency measures that pay for themselves through savings. Some measures such as Solid Wall Insulation which only reaches a small market segment and is significantly more expensive, will be unlikely to meet the Golden Rule. Therefore ECO will offer further support in addition to Green Deal finance for these harder to treat properties. One reason why Solid Wall Insulation is currently more expensive is that the supply chain is still relatively small
in comparison to the scale of supply required in the marketplace. The Energy Company Obligation will play a huge role in scaling this supply chain, reducing costs and ensuring more consumers can benefit from the Green Deal.

For further information or to discuss your company's Green Deal Accreditation please dont hesitate to give our Green Deal team a call on Freephone 0800 882 4304 apply online or return our application form.