What is ECO?
The Energy Companies Obligation (ECO) was introduced at the beginning of 2013. It is an energy efficiency programme that replaces two previous energy efficiency schemes: the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP).
ECO places legal requirements on Britain’s larger energy suppliers to deliver energy efficiency measures to domestic energy users.
If you would like to find out more about ECO, contact the fuel poverty scheme in your London Borough by using our Directory or contact the Energy Saving Advice Service on 0300 123 1234.
How does it work?
There are two strands to the Energy Companies Obligation; the Carbon Emissions Reduction Obligation (CERO) and the Home Heating Cost Reduction Obligation (HHCRO). Each of these strands imposes specific requirements and targets on energy suppliers.
Home Heating Cost Reduction Obligation (HHCRO)
(Also sometimes referred to as ‘Affordable Warmth’ or ‘AW’)
The Home Heating Cost Reduction Obligation requires suppliers to promote measures which improve the ability of low income and vulnerable household to heat their homes. This includes actions that result in heating savings, such as the replacement or repair of a boiler.
Carbon Emissions Reduction Obligation (CERO)
Under CERO, suppliers must promote ‘primary measures’, including roof and wall insulation and connections to district heating systems. Some CERO must also be delivered in rural areas.
The energy regulator Ofgem administers and monitors ECO. Further details can be found on their website, including information for domestic consumers, installers and suppliers.
ECO is a complex beast – the description above makes it sound straightforward, but there’s a lot to it and it goes through quite frequent reviews and changes.
Underpinning both parts of the obligation is something like an auction system, where the energy companies offer a price for certain types of energy efficiency measures. This price affects the level of grant funding that a householder can then receive. What this means is that the grant available under ECO can fluctuate – sometimes a householder might receive full funding, sometimes they might be expected to make a financial contribution (which they may not be able to do…).
Another point of confusion: you don’t have to go to your own energy supplier for measures – so if you’re a British Gas customer, you can still take up an ECO offer from EDF Energy. In many cases, marketing and promotion of ECO schemes is carried out by managing agents or installation firms: this can cause confusion for householders and could carry the risk of mis-selling by rogue firms.
Eligibility is usually based on housing tenure and receipt of certain income and employment related benefits. Some local authorities have agreed broader eligibility criteria, for example, health vulnerabilities. In London, the following local authorities have broader criteria (at 1 February 2018):
- Barking and Dagenham
- Hammersmith and Fulham
- Kensington and Chelsea
- Waltham Forest
Despite its complexity, ECO is the biggest game in town for energy efficiency funding across the country. Specialist advice and referral services, such as the Energy Saving Advice Service, can help walk households through the process.