CSE responds to ECO4 Consultation

7 September 2021

CSE has responded to the Government’s consultation on the future design of the Energy Company Obligation (ECO4), a programme to deliver energy efficiency measures in homes across Great Britain.

Achieving net zero is one of the most important challenges and opportunities facing the UK and since it began in 2013, the ECO scheme has contributed to making homes warmer and emissions lower. Over 3.1m energy saving measures have been installed in over 2.3m homes under the scheme.

We welcome the continuation and expansion of the scheme and the continued focus on low income and vulnerable households. The ‘worst first’ will help those with the largest fuel poverty gap and will require a whole-house retrofit to meet the needs of those supported. However, our response also highlights a number of key issues.

Key ECO4 policy changes or clarifications CSE is calling for

  • BEIS to prohibit customer contributions through primary legislation.
  • The solid wall minimum should to be set at 70,000 homes.
  • The policy should be designed to complement HUGS and LADS rather than compete for the same measures.
  • Any change in heating system type needs to be accompanied by adequate advice from a trained person i.e. City & Guilds in Energy Awareness or a retrofit coordinator.
  • All householders should receive advice to ensure the scheme maximises its impact on fuel poverty i.e. access to benefits, grants, tariffs and minor energy efficiency measures.
  • Increased support for broken gas boilers which is accessible via Gas Safe engineers rather than ECO installers.
  • Alongside wet low temperature distribution systems, CSE advocates for a hot water tank to be installed i.e. to ensure any systems is retrofit ready for a heat pump.
  • Retrofit coordinators need to be impartial and independent, as such they should not be employed by the installer. The costs should be recovered separately from the installation process.

Ensuring householders receive adequate advice and fuel poverty support

The scale of the challenge to meet our fuel poverty and net zero targets shouldn’t be underestimated. Householders will be required to embrace new heating technologies; measures whose installation can lead to significant disruption and smart technologies that transform the way they use their energy. ECO4 plans to support many of these interventions and as such will have a significant impact on people’s lives and the way in which they interact with their energy use.

We are calling for recognition of the comprehensive network of advice provision needed to ensure people (a) accept the opportunities and then (b) make the most of them through warmer homes with lower energy bills.

It is also essential that ECO4 follows PAS 2035 and utilises independent retrofit assessors and coordinators to ensure that the measures specified are appropriate for the property (rather than specified by installers who have vested interests in promoting their own technologies).

Furthermore there needs to be post-installation advice to ensure householders understand how to optimise energy use in their home. The advice provider should also be able to offer further fuel poverty support to maximise ECO4’s impact on fuel poverty i.e. advice on behavioural changes, low-cost and no-cost measures that could be adopted, local and national grant and discount schemes, financial benefits that they may be entitled to and energy tariffs that are most appropriate to their new situation.

An end to customer contributions

The consultation document does not make any reference to the customer contributions common-place in the previous ECO3 scheme. Household contributions effectively exclude the poorest households from a scheme they are already paying for via their energy bills. CSE, along with other charities and advice agencies like NEA and Citizens Advice, have long called for an end to customer contributions. Indeed, under the first two phases of LADS they haven’t been allowed. If installers do ask for a contribution, then this should be accompanied by fines and delivery penalties for the supplier.

Reducing the risk of a wider downturn in energy efficiency installations

The transitional period between each iteration of the ECO has seen a slowdown in the installation of energy efficiency measures because regulations were not in place before the new scheme went live, causing uncertainty with suppliers. The primary legislation required must be in place to support the scheme in advance of its launch. This means that the accompanying Ofgem guidance also needs to be finalised in time.

Policies working collaboratively

There is huge potential for ECO4 to work alongside the Home Upgrade Grant (HUG), Local authority Delivery Scheme (LADS) phase 3 and the Social Housing Decarbonsation Fund (SHDF). Ideally these policies will not compete for the same measure nor undermine each other when the funding is combined. We believe a higher solid wall minimum and an increased focus on insulation rather than heating will aid this. HUGS and LADS can be used to fund the heat source whilst ECO4 addresses the building’s fabric.

As noted in our response the package of measures needs to be funded to achieve a combined end goal. If a measure funded under ECO4 improves the building SAP rating to a point that makes the measure unviable under HUG or LADS, then this needs to be addressed to ensure a package of measures is installed as part of a whole-house retrofit. This will also avoid the unnecessary cost of remedial work to solid wall insulation when the gas heating is eventually replaced i.e. the flue & meter box detailing which would need to be redone. It is therefore imperative that there is sustained investment in HUG, LADS and the SHDF within the forthcoming Spending Review.

At CSE, we have a long legacy of providing advice and support to people suffering from cold homes and high energy bills and working with local authorities and suppliers providing energy saving measures to homes. We have significant experience working with and across the very groups this consultation will impact.

You can read our full consultation response here.

 

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