Plans to completely refocus Energy Company Obligation scheme will axe requirement to promote carbon saving measures
The government has unveiled plans to refocus its flagship energy efficiency scheme, the Energy Company Obligation (ECO), on fuel poor households.
The ECO consultation, published late last week, proposes the removal of the Carbon Emissions Reduction Obligation (CERO) arm of the scheme, which requires suppliers to promote green "primary measures" for energy saving, such as roof and wall insulation and connections to district heating systems.
Instead, the focus of the updated scheme would be on "Affordable Warmth", the government said, with the number of households eligible for support as part of this group expanded to 6.5 million, including households receiving Child Benefit and disability benefits.
The reforms would follow a transition period from 2017 to 2018, which saw the Affordable Warmth Obligation almost double its share of the ECO scheme to 70 per cent, while CERO saw its share scaled back to 30 per cent.
The government has committed £640m of funding a year for ECO through to March 2022, with a target to install insulation and modern efficient heating systems in 900,000 homes by that date.
The proposed reforms are part of the government's pledge in the Clean Growth Strategy to bring 2.5 million fuel poor homes up to an Energy Performance Certificate Rating of C by 2030.
"We have made clear our commitment to eradicating fuel poverty and by making our flagship energy scheme 100 per cent focused on low-income families we are taking another step towards achieving this goal," Energy and Clean Growth Minister Claire Perry said last week.
"As set out in our Clean Growth Strategy, we also want to continue to drive world-leading British innovation in green technologies for the benefit all consumers," she added, pointing out that the reforms will also offer more support for "innovative measures" such as robotic insulation services.
Industry groups broadly welcomed the plans, but warned changes should be finalised as soon as possible to provide certainty to the energy efficiency sector, which has endured waves of policy upheaval in recent years.
"Energy efficiency delivers benefits to the economy, reduces our emissions and brings bills down for consumers - so we have long called for it to be a national infrastructure priority," Lawrence Slade, chief executive of Energy UK, said.
"While we have seen significant improvements and welcome plans to do more, both our industry and the supply chain urgently need clarity on the future of these programmes if we aren't to fall further behind in reducing the number of draughty homes across the UK.
"It's vital these consultations lead to the certainty and direction needed to get installation of energy efficiency measures back up to speed with fully funded targeted measures to bring people out of fuel poverty."
Critics have also warned that the governments proposals would represent a scaling back of previous domestic energy efficiency schemes and lack the reach required to ensure medium-term carbon targets are met. Green building campaigners are continuing to call on the government to introduce a raft of new energy efficiency measures, including zero carbon home targets and improved energy efficiency financing schemes.
"Since the government has proposed to drop the CERO target within the obligation, there is now no longer funding to support the wider decarbonisation of homes," Kelly Greer, research director at the Association for the Conservation of Energy, told BusinessGreen. "It is critical that government and industry now work together to develop a wider energy efficiency policy to meet the carbon reduction targets outlined within the Clean Growth Strategy."
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