Government launches new ECO+ scheme

The Government has announced its new ECO+ scheme which will make £1 billion of funding available for energy efficiency improvements, such as loft or wall insulation.

BEIS has confirmed that the new ECO phase, ECO+, will be available to a wider range of groups, helping households who do not currently have access to any other government funding to improve home energy efficiency.  Around 80% of the funding will be made available to the least energy efficient homes in council tax bands A to D, with an EPC rating of D or below, while around a fifth of the funding will be provided to the most vulnerable, including those on means tested benefits or in fuel poverty. Currently, 43.5% of all homes in the North meet EPC Band ‘C’ or higher.

The ECO+ scheme will run from spring 2023 for up to three years although the Government has said it will allow suppliers to begin installing measures sooner.

According to the Government, the measures installed, predominantly insulation measures, will help households cut annual bills by an average of £310 as well as supporting the government’s new ambition, announced as part of the Autumn Statement, to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030.

A new £18 million public information campaign will also offer technical tips and advice for people to reduce their energy use while keeping warm this winter.

The latest measure is an extension of the existing Energy Company Obligation (ECO) scheme and covers homes that aren’t eligible for support under the existing ECO4 scheme.

Social housing tenants will be eligible for insulation in EPC bands E, F or G, whilst households in EPC band D will be limited to Innovation Measures.  As with ECO4, eligible measures will be limited to any single insulation measure but not heating controls.

The same LA and Supplier Flex mechanism will carry over from ECO4 for the low-income group and BEIS will explore ways for further encourage LA and Supplier Flex referrals through the scheme.

For the PRS, given landlords are already required to improve homes to an EPC band E up to a spend cap of £3,500, PRS households in EPC bands F and G will be excluded, with limited exceptions.  For the general eligibility group, PRS households will only be able to receive higher-cost measures that are more likely to be delivered with a customer contribution from the landlord through the scheme.

The £1 billion scheme is part of the new £6 billion investment announced in the Autumn Statement to be made available from 2025 to 2028 – to contribute to the existing £6.6 billion energy efficiency funding pot, which the government has pledged over this Parliament to help decarbonise homes and buildings and ensure all homes meet EPC Band C by 2035.

This new funding is a welcome announcement although ECO+ is just a part of wider action needed and the Climate Change Committee continues to recommend that the Government introduces a national home retrofit scheme in the near-term to get on track to meet climate goals. The Northern Housing Monitor revealed that poorly insulated homes are costing tenants at least £680 more this year than they would if properly insulated and that 3.8m homes across the North fall beneath the key energy efficiency standard of EPC C.

The government is consulting on proposals for ECO+ until 23rd December 2022.