The government has confirmed it will double the timetable for the Energy Companies Obligation (ECO) as part of its attempt to reduce energy bills. And there are fears jobs could disappear as a results of the changes.
The announcement by Energy Secretary Ed Davey came as part of a range of measures intended to reduce energy bills by an average of £50 per year per household. It also included £540m in new investment in energy efficiency.
The Association for the Conservation of Energy has warned that reducing activity through ECO could lead to 13,000 job losses across the insulation industry.
The move sees the ECO scheme, which targets low income households in need of insulation and is paid for through a levy on energy bills, extended to run over four years instead of two, with the scheme extended through to March 2017.
The government move means energy companies will have four years to deliver the expected level of insulation work through the programme, rather than two, meaning there will be less investment in the short term.
The Department of Energy and Climate Change (DECC) also confirmed that the government would reduce the carbon reduction element of ECO by 33% for the period to 2015, and set a target for the period to 2017 reflecting this same level of activity.
DECC said the scheme would be available to all people moving house including those who don’t pay stamp duty, helping around 60,000 homes a year, over three years.
DECC said the Government would also introduce a scheme to support private landlords in improving the energy efficiency of their properties, which will improve around 15,000 of the least energy efficient rental properties each year for three years.
DECC also said that an additional £90m would be spent over three years improving the energy efficiency of schools, hospitals and other public sector buildings.
The government will also increase the funds available to local authorities this year through Green Deal Communities from £20m million to £80m million, to help support “street-by-street programmes for hard-to-treat homes in a cost-effective way”.
DECC said levies providing support for existing low carbon energy projects will not change, such as the Renewables Obligation (RO), Contracts for Difference (CfDs) and feed in tariffs (FITs).
The UK Green Building Council (UKGBC) said the changes to ECO meant the number of solid wall insulation installations energy suppliers are required to make under ECO will be reduced to 100,000 over the new four year period (25,000 per year).
Paul King, UKGBC chief executive said: “Make no mistake, this is bad news for people who cannot afford to heat their homes, especially if they live in solid walled properties, and bad news for thousands of construction industry workers who may well be joining the dole queue this Christmas.”
The National Insulation Association (NIA) said it had some serious concerns about the proposal to cut the amount of solid wall insulation in ECO from around 65,000 installations a year to just 25,000 a year under the revised ECO proposals.
NIA added that the new £540m schemes being proposed by government alongside the changes to ECO are a positive step and have the potential to significantly increase the number of households receiving energy efficiency measures if they are correctly designed to maximise consumer uptake. The NIA urged the government to involve our industry in the design of these schemes to ensure they deliver maximum ‘bang for the buck’. Delays and uncertainty whilst government consults on any changes could result in a lack of activity and projects being put on hold or worse still cancelled.