The Department of Energy and Climate Change (DECC) confirmed today that social housing landlords are to be excluded from the Government’s Energy Companies Obligation (ECO) Scheme which is set to run alongside the forthcoming Green Deal. Under the ECO, up to £1.3 billion is to be provided by energy companies to fund the installation of energy efficient home improvements in the fight against fuel poverty.

The Green Deal will offer households the chance to have energy efficient home improvements carried out in their homes without any upfront cost. A Green Deal loan will be provided to cover the cost of the work and it will be repaid through savings in energy bills. A ‘Golden Rule’ will apply to ensure that the proposed savings from carrying out the work will more than cover the loan repayments in respect of the installation.

The Energy Companies Obligation will provide funding from the big six energy companies to help households have energy saving improvements to their homes which whilst beneficial, would fail to satisfy the Golden Rule. Funds will also be made available to those on benefit, pensioners and the disabled who are suffering from fuel poverty. Fuel poverty is defined as existing in a household where more than 10% of income goes in heating the home. Funding provided under the ECO initiative will be available to private households, including privately rented property but will be excluded from social housing.

ECO funding will be shared between ‘difficult to deal’ with properties and the provision of ‘affordable warmth’. The affordable warmth element of the ECO funding will be targeted at low-income households who will be identified through the state benefits system.

Energy Secretary Chris Huhne announced that the Green Deal and the ECO are expected to lead to £14 billion of investment over the next decade, creating 65,000 jobs in the construction industry in the process.