ECO3: what are the key changes?

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ECO3 is the latest change to the Energy Company Obligation (ECO) scheme, originally launched back in January 2013. Now focussing on low income and vulnerable households, ECO3 is intended to assist in reducing ‘fuel poverty’ by March 2022.

In this post, we’ll present the key changes from ECO2t and what they mean for the consumers.

WHAT IS ECO3?

Mainly, the ECO3 is focusing on lowering energy bills for households under ‘fuel poverty’ by upgrading the energy efficiency of their homes.

As a reminder, the Government defines ‘Fuel Poverty’ as a household whose fuel requirements are above the national average, and if they were to try to reach those requirements, their leftover income would sit them below the official poverty line.

Being more energy efficient also means reducing the UK’s energy imports as well as improving the air quality and reducing the greenhouse emissions in the domestic sector in the long term. Making energy efficiency improvements in homes is also expected to have health benefits.

WHAT DO WE NEED TO TAKE FROM ECO3?

Eligible beneficiaries

A few changes have been made with regards to the beneficiaries of the ECO scheme under ECO3.

Households in ‘fuel poverty’ ONLY

Since 1stOctober 2018, ECO3 has only been available to people classed as in ‘fuel poverty’. If you are not in receipt of one of the qualifying benefits you won’t be eligible for ECO3 funding. Even though this measure might seem exclusive, the qualifying criteria has been widened to include more benefits.

Disability/Child benefits

The ECO3 scheme has been extended to households who receive disability benefits and/or child benefits. The new qualifying benefits include Disability Living Allowance, Carers Allowance, Personal Independence Payment, Constant Attendance Allowance, Armed Forces Independent Payment, Industrial Injuries Disablement Benefit and Severe Disablement Allowance.

Thousands of households should be eligible for this scheme thanks to the removal of income caps on existing benefits for Universal Credits and Tax Credits and the new benefit additions.

Social Housing properties

ECO3 is now allowing Social Housing homes with an EPC rating of D and below to receive insulation measures.

Rural areas

In order to support the rural communities, 15% of the ECO3 scheme will be set aside for rural households.

Lower supplier threshold

Funding will be available to more consumers as the “supplier threshold” for smaller suppliers will be reduced from 250,000 to 200,000 in April 2019 and 150,000 in April 2020.

Insulation measures

Solid Wall insulation

ECO3 is to continue funding for solid wall insulation. Whilst concerns were raised that the high costs and lack of options were preventing people living in houses with solid walls from benefitting from the ECO funding, the number of treated homes via ECO3 has been kept to 17,000.

Oil Boiler replacements

ECO3 is to continue the funding of oil boiler replacements throughout the full phase of funding. However, they are only eligible within the “Broken Boiler Cap”.

Heating System upgrades

ECO3 is now allowing eligible households to upgrade their current heating system as long as some insulation is being installed (excluding loft insulation).

New and innovative energy efficiency products

In order to support the Government’s Clean Growth Strategy, 10% of ECO3 will be supporting the installation of new energy efficiency technology. This measure is also available for D rated Social Housing properties.

The points above focus on the main policies included in ECO3. For further details, we encourage you to read the ECO3 2018-2022 Government response available to download here:

https://www.gov.uk/government/consultations/energy-company-obligation-eco3-2018-to-2022