Providing funding for the Government’s Energy Companies Obligation (ECO) Scheme could be set to wipe out the profits of small energy suppliers it was claimed today. The ECO, which runs alongside the Green Deal is designed to provide up to £1.3 billion per year from energy suppliers to pay for energy efficient home improvements in ‘difficult to treat’ homes and for households suffering from fuel poverty.
The ECO provides for free insulation and other energy-saving products such as ‘A’ rated central heating boilers to be fitted in mainly private properties. Whilst most of the funding will be provided by the big six energy suppliers who supply around 98% of UK households, it will also apply to smaller energy suppliers once they have 250,000 customers. However, they complain that they only need to have 125,000 customers because most homes are supplied with dual-power (electricity and gas) and these will be double-counted.
One small energy supplier complained that their share of the bill could be as much as £2 million per year, yet they had pre-tax profits of just over £1 million last year. Another expects to have to raise prices in order to contribute to the ECO fund which will be ‘completely against’ the idea of a competitive market for energy.