ECO Replacement Scheme Due in 2018

ECO replacement will not start until 2018 even though the

current ECO Scheme, the Energy Companies Obligation,

is due to end in March 2017 according to Lord Bourne,

the Energy Efficiency Minister.

The current ECO Scheme consists of three parts:

• CERO, the Carbon Emissions Reduction Obligation
• CSCO, the Carbon Savings Community Obligation
• HHCRO, the Home Heating Cost Reduction Obligation (Affordable Warmth Scheme)

CERO and CSCO provide funding mainly for loft insulation and cavity wall insulation whilst HHCRO, often referred to as the Affordable Warmth Scheme, provides funding to replace inefficient or faulty gas central heating boilers for private householders on means tested State Benefits.  

Although the current ECO Scheme was designed to tackle fuel poverty, it does so by focusing on reducing carbon emissions.  Under HHCRO the amount of a boiler grant is determined in part by the amount by which carbon emissions are reduced as a result of removing an inefficient central heating boiler and replacing it with a new energy efficient central heating boiler.  The ECO replacement will focus more on fuel poverty than carbon emissions reduction.

ECO Replacement – Transitional Arrangements

The current ECO Scheme is due to end in March 2017 and although its replacement will not start until 2018, transitional arrangements will be put into place to ensure that the Government continues to tackle fuel poverty in the meantime.  Exact details of the arrangements have not been announced yet but it is expected that the focus will be more on HHCRO, the Affordable Warmth Scheme, than on CERO and CSCO.  This means that although the scheme will designed to help the Government reach its targets for carbon emissions reduction, the main emphasis will be on reducing fuel poverty.  

Domestic Energy Efficiency Supplier Obligation

The current Energy Companies Obligation funding amounts to £1.1 billion per year and it is anticipated that the ECO Replacement, the new domestic energy efficiency supplier obligation, will provide around £640 million per year.

Affordable Warmth Scheme Qualifying Criteria

Currently, to meet Affordable Warmth Scheme criteria to qualify for a boiler grant, householders must live in a private house, receive certain means tested State Benefits and have an inefficient or faulty gas central heating boiler.  If the emphasis is to be placed on tackling fuel poverty it is likely that part of the ECO replacement qualifying criteria will be changed to take account of the proportion of household income which is spent on heating bills. A household is considered to be suffering from fuel poverty when more than 10% of household income is spent on keeping the home to a reasonable level of warmth.