What is ECO3?

The energy efficiency scheme for Great Britain, Energy Company Obligation (ECO) places legal obligations on larger energy suppliers to deliver energy efficiency measures to domestic premises. ECO3 which is the government’s response to the Energy Company Obligation will run from Autumn 2018 until March 2022 and delivers energy efficiency and heating measures to homes in Great Britain.

The scheme which launched in October 2018 provides numerous benefits for homeowners, key of which are:

ECO3 Target – the overall target for ECO3 has been increased by 7% to £8.235bn lifetime bill savings. The higher target could be accommodated within a £640m “spending cap”, which is a stretch to previously proposed spending. In addition, there will be no “interim targets” – a supplier will comply with ECO3 as long as they have met their total obligation by March 2022.

Affordable Warmth – which is focused on low income, vulnerable and fuel poor households. With ECO3, the Government has set the eligibility criteria which will result in approximately 6.6m households being eligible for the scheme. In addition, it will allow up to 25% of the obligation to be met through measures delivered under Local Authority Flexible Eligibility.

Fuel Poverty Reduction in rural households – to protect rural households, the Government will require suppliers to meet at least 15% of their obligation by delivering measures in rural areas. To strengthen the scheme’s link to the Fuel Poverty Strategy further, it will also provide an uplift for measures delivered to low-income households living in F and G rated properties under the Flexible Eligibility part of the scheme. Given landlords’ responsibilities under the Private Rented Sector Minimum Standard Regulations, the Government will limit the use of ECO in certain circumstances so that landlords do not use it to meet their basic requirements.

The scheme’s other main policies include:

Reducing the current supplier obligation threshold of 250,000 customer accounts (or equivalent) for the scheme, in a phased way, to 150,000 customer accounts (or equivalent) from 2020
Allowing up to 10% of a suppliers’ obligation to be met through the delivery of new, innovative products
Supporting households that have a broken heating system by allowing the equivalent of 35,000 broken heating systems to be replaced per year
Encouraging a multiple measure approach by allowing the replacement of inefficient heating systems to be replaced (outside of the broken heating system cap) if they are installed alongside insulation
Requiring the equivalent of at least 17,000 solid walled homes to be treated per year, either through solid wall insulation, or using a combination of other technologies (if equivalent savings can be achieved in the property)

Ultimately the focus of ECO3 is on insulation and heating measures and supports vulnerable consumer groups. ECO as a whole is intended to assist in reducing carbon emissions, maintaining the security of energy supply and reducing fuel poverty.

The ECO2 obligation period which ended on 31 March 2017, and was extended by 18 months, has now resulted in ECO3.

Contact us to find out more about all the ways that the BBA can help you access ECO3 but also grow your business and save you time and money.

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