The Energy Companies Obligation (ECO) operates alongside the Government’s Green Deal Initiative and the Electricity and Gas (Energy Companies Obligation) Order 2012 was approved by Parliament in December 2012.  It places responsibility on the BIG SIX ENERGY COMPANIES to provide funds to pay for the installation of certain home improvements intended to make private homes more energy efficient.  These home improvements include cavity wall insulation, external and internal solid wall insulation, loft insulation and improvements to central heating systems, notably the repair or replacement of inefficient and faulty central heating boilers. It is estimated that around £1.3 billion per year will be made available to cover the cost of these energy-saving home improvements and the ECO is scheduled to run initially until March 2015.

There are three main obligations which the six major energy companies have been tasked with:

• Carbon Saving Community Obligation

The Carbon Saving Community Obligation is designed to ensure that at least 15% of the funding provided by the six main energy companies goes towards installing energy efficient home improvements in the homes of low-income households in rural areas.

• Carbon Saving Obligation

The Carbon Saving Obligation helps to fund difficult to install insulation measures which can’t be funded solely through the Green Deal initiative, such as solid wall insulation (which would almost certainly fail to meet the Green Deal’s ‘Golden Rule’ criteria).

• Affordable Warmth Obligation

The Affordable Warmth Obligation provides funding from the six main energy companies to cover the full cost of installing certain heating and insulation products into the private properties of low-income households.  It applies to homeowners and tenants who live in poorly heated and insulated homes and who receive certain state benefits.  Specifically, it is targeted at low-income households, the elderly and the disabled.

For more information and to read definitions of the various terms used by the Affordable Warmth Scheme, click on the relevant headings below:

AFFORDABLE WARMTH ELIGIBILITY

1. The state benefits referred to in the definition of affordable warmth group eligibility are:

(a) child tax credit together with a relevant income of £15,860 or less

(b) income-related employment and support allowance and:

(i) receiving a work-related activity or support component; or

(ii) has parental responsibility for a qualifying child; or

(iii) is in receipt of a qualifying component;

(c) income-based job seeker’s allowance and:

(i) has parental responsibility for a qualifying child; or

(ii) is in receipt of a qualifying component;

(d) income support and:

(i) has parental responsibility for a qualifying child; or

(ii) is in receipt of a qualifying component;

(e) state pension credit; or

(f) working tax credit together with a relevant income of £15,860 or less and:

(i) has parental responsibility for a qualifying child; or

(ii) is in receipt of a disabled worker element or severe disability element; or

(iii) is aged 60 years or over.

2. In paragraph 1:

(a) “qualifying child” means, in relation to a person in receipt of an allowance, income

support or working tax credit, a child who ordinarily resides with that person and who:

(i) is under the age of 16; or

(ii) is 16 or over but under the age of 20 and in full-time education (other than higher education within the meaning of section 579(1) of the Education Act 1996);

(b) “qualifying component” means:

(i) child tax credit which includes a disability or severe disability element;

(ii) a disabled child premium;

(iii) a disability premium, enhanced disability premium or severe disability premium; or

(iv) a pensioner premium, higher pensioner premium or enhanced pensioner premium;

(c) “parental responsibility” has the same meaning as in section 3 of the Children Act 1989.

MEANING OF HOUSEHOLDER

1. (1) In relation to England and Wales, householder means a person, who is, in relation to domestic premises,

(a) a freeholder;

(b) a leaseholder with a term of 21 years or more unexpired at the time a supplier offers to carry out an action;

(c) a tenant, other than a tenant within sub-paragraph (f) or to whom sub-paragraph (2) applies;

(d) a holder of a licence to occupy, which meets the conditions in paragraph 12(a) and (b) of Schedule 1 to the Housing Act 1985;

(e) a holder of an assured agricultural occupancy under Part 1 of the Housing Act 1988; or

(f) a protected tenant under section 1, Part 1 of the Rent Act 1977.

(2) This sub-paragraph applies:

(a) in relation to premises in England, to a tenant of low cost rental accommodation; and

(b) in relation to premises in Wales, to:

(i) a tenant of a dwelling-house let under Part IV of the Housing Act 1985;

(ii) a tenant of a dwelling let by a landlord registered as a social landlord under Chapter

1 of Part 1 of the Housing Act 1996; or

(iii) a tenant of a local authority, other than under Part IV of the Housing Act 1985.

(3) In this paragraph:

(a) “low cost rental accommodation” has the same meaning as in section 69 of the Housing and Regeneration Act 2008;

(b) “tenant” includes a sub-tenant.

2. (1) In relation to Scotland, householder means a person who is the owner or tenant of domestic premises.

(2) For the purposes of this paragraph:

(a) “owner” includes any person who under the Land Clauses Acts would be enabled to sell and convey land to promoters of an undertaking;

(b) “tenant” includes a sub-tenant and a person who:

(i) occupies a dwelling in terms of a contract of employment;

(ii) has a licence to occupy a dwelling; or

(iii) is a cottar within the meaning of section 12(5) of the Crofters (Scotland) Act 1993 but excludes a tenant of a social landlord within the meaning of section 165 of the Housing (Scotland) Act 2010.

QUALIFYING BOILER:

(a) in the case of a boiler to be repaired, a boiler which the Administrator is satisfied:

(i)  is not functioning efficiently or has broken down; and

(ii) has a seasonal energy efficiency value of not less than 86% when assessed against the Standard Assessment Procedure;

(b) in the case of a boiler to be replaced, a boiler which the Administrator is satisfied—

(i)  a boiler which is not functioning efficiently; or

(ii) a boiler which has broken down and which cannot be economically repaired;

OVERALL OBLIGATION PERIOD

The overall obligation period is the period—

(a) beginning with 1st January 2013, except for a new supplier; and

(b) ending with 31st March 2015.

ACHIEVEMENT OF HOME HEATING COST REDUCTION OBLIGATION

A supplier must achieve its total home heating cost reduction obligation by 31st March 2015.

FINAL DETERMINATION AND REPORTING

The Administrator must determine whether a supplier has achieved its:

(a) total carbon emissions reduction obligation;

(b) total carbon saving community obligation; and

(c) total home heating cost reduction obligation.

The Administrator must submit to the Secretary of State a report each month, commencing in March 2013, setting out the progress which suppliers have made towards meeting their obligations under this Order.

To see if you qualify for the Eco Affordable Warmth Scheme…..APPLY HERE