Improving the energy efficiency of our homes is the best long-term solution to reducing energy bills and, therefore, tackling fuel poverty.
This is especially the case when energy prices are high and forecast to remain high. From 1 January to 31 March 2023 the energy price cap was £4,279. From 1 April the energy price cap was £3,280 for a dual fuel household paying by direct debit based on typical consumption, a reduction of almost £1,000 from the current level, reflecting recent falls in wholesale energy prices. The government is still protecting consumers from these high prices through the Energy Price Guarantee (EPG), which for a typical household will bring energy bills down to around £2,500 per year until the end of June 2023.
The Energy Company Obligation (ECO) is one of the government’s most successful schemes for improving domestic energy efficiency. It obligates the larger energy suppliers to deliver bill savings for households by installing energy efficiency measures. Since it began in 2013 it has delivered around 3.5 million measures in around 2.4 million properties. Around 9% of households in Great Britain have had an ECO measure installed. The latest iteration, ECO4, is expected to deliver energy efficiency measures to an estimated 450,000 low-income and vulnerable households.
However, this support only goes so far. In response to persistently high energy prices, we are extending the support available through a new ECO energy efficiency scheme: the Great British Insulation Scheme. Previously titled and consulted on as ECO+, it broadens the eligibility pool beyond the low-income and vulnerable households that ECO4 prioritises, to millions of others who do not currently benefit from government support to upgrade their homes. We have renamed the scheme to help with consumer recognition and better explain the energy efficiency support available.
A minimum of 20% of the support provided through the Great British Insulation Scheme will go towards boosting support for low-income and vulnerable households. This is likely to help those low-income households unable to get support through ECO4 because of their property’s physical circumstances, and therefore will help to reduce fuel poverty in Great Britain even further.
The Great British Insulation Scheme will run until 2026 alongside and complementing ECO4, as well as existing support schemes like the Home Upgrade Grant and Social Housing Decarbonisation Fund. Together, these schemes provide comprehensive support for those least able to make their homes more energy efficient.
We estimate that the Great British Insulation Scheme will make around 300,000 homes more energy efficient, primarily through the installation of insulation measures such as cavity wall insulation. Those receiving Energy Company Obligation Government Response 6 insulation upgrades will see their bills reduce by around £300-400 on average per year, while the Scheme is predicted to be delivered by around 2,000 installers per year in the final two years across Great Britain.
The Great British Insulation Scheme is the first scheme launched by the new Department for Energy Security and Net Zero and will deliver greater energy efficiency for hundreds of thousands of households, seizing the opportunities of Net Zero, reducing energy bills and helping to tackle fuel poverty. By rolling out insulation measures such as cavity wall insulation, the Great British Insulation Scheme also builds momentum towards government’s new ambition to reduce total UK energy demand by 15% from 2021 levels by 2030.
The Great British Insulation Scheme will enable thousands more to insulate their homes, protecting the pounds in their pockets, and creating jobs across the country.
