Energy Company Obligation (ECO3) consultation - a review

This is a summary of some key points from the proposed ECO3 policy. I leave it to the readers to decide the impacts the Policy will have on fuel poverty and the industry. Your comments and views are most welcome.

ECO3 will focus entirely on fuel poverty as previously indicated by the Government.
The Help to Heat eligibility criteria will be expanded to include child benefits and disability and related disability benefits.
Oil and coal fuelled systems will be phased out. This is a good move in principle to reduce carbon emissions.
First time central heating (FTCH) will be applicable to both private and social housing.
Inefficient/broken ESHs can be replaced as FTCH. All large volume, slimline and convector ESHs will be considered inefficient. However, ESHs can be installed as FTCH.
Up to 20% CERO measures can be carried over to ECO 3, but it’s not clear what savings they will be assigned.
All HHCRO measures except oil and coal boilers can be carried over from ECO2t to ECO3.
The consultation document states that any carry over measures will get a 30% reduction in savings, but in the London consultation event BEIS mentioned that this reduction is subject to the legislation being in place on time. I don’t know what this means but I don’t know if I would like to take a risk of continuing the delivery at the risk of losing 30% savings.
ECO cannot be blended with RHI but it can be blended with other subsidies like HEEP in Scotland!!!? This will have a negative impact on the delivery of heat pumps and biomass boilers in ECO. Heat pumps oriented DHS schemes will also be affected. BEIS estimates average EWI cost of £8,000 which is also an average cost of installing an ASHP. The entire cost is most unlikely to be covered by ECO funding without substantial customer contribution.
The ban on ECO-RHI blending and oil boilers will also make delivery of heating measures difficult in rural areas which are pre-dominantly off gas grid. BEIS expects these properties to receive insulation measures, but a large proportion of rural houses are solid wall construction.
Rather than using the Legislation to stop suppliers claiming RHI, it is considered to be appropriate to ban the blending and not close the avenue to promote renewables under ECO.
The qualifying boiler/ESH criteria are being replaced by broken and inefficient boiler/ESH categories.
Boilers lifetime is reduced from 12 to 3 years and ESH lifetime is reduced from 20 to 5 years. Technically this means boilers and ESHs installed in ECO1 and ECO2 can be officially replaced in ECO3 upon proving them as broken/inefficient because as per BEIS’s logic they would have lived their life.
Maximum 35,000 broken boilers can be replaced per year. This means remaining annual targets will have to be met via insulation measures, FTCH, DHS, inefficient heating upgrades and heating controls.
Inefficient heating upgrades cannot be installed without installing an insulation measure in the same property.
If a property is already insulated, it cannot receive an inefficient heating upgrade. The revised deemed scores are likely to make any installations impossible without significant contribution from fuel poor customers unless ECO rates increase substantially.
Are you an SWI installer or system manufacturer? If so, think about how quickly you can diversify your business. The solid wall minimum cap is reduced to 17000 measures per annum. However, suppliers can avoid doing any SWI by doing measures that will achieve equivalent bill savings to SWI.
RdSAP 9.93 assigns a U-value of 1.7 to all solid wall types. It is possible to achive the U-vale of 2.1 on BRE approved U-value calculators for many solid wall construction types.
The shift in pre-install U-value from 2.1 to 1.7 in my opinion can have an impact of 3 to 4 SAP points. This means a lot of properties with previously E rated EPCs may have suddenly become efficient without any intervention!!!
Suppliers can deliver up to 25% of their obligation through flexible eligibility. Note that <2% of ECO2t measures are delivered through this route. Are there enough Councils interested in participating in ECO through this route?
15% supplier obligation has to be delivered in rural areas. This has to be delivered considering the broken boiler cap, inefficient heating replacement cap, ECO-RHI blending ban, oil boiler ban, no access to mains gas, and no incentive to install SWI. The best possible way to do this is through flexible eligibility provided rural councils participate in the Scheme.
Installers will require registrations under Quality Mark, PAS 2035 and PAS 2030 to install ECO3 measures. Needless to say, this is besides all trainings and competency requirements under building regulations.
Up to 20% supplier obligation can be delivered through demonstration actions, innovation and in-situ measurement of performance. More details are awaited.

Energy Company Obligation (ECO3) consultation – a review

This is a summary of some key points from the proposed ECO3 policy. I leave it to the readers to decide the impacts the Policy will have on fuel poverty and the industry. Your comments and views are most welcome.

ECO3 will focus entirely on fuel poverty as previously indicated by the Government.

The Help to Heat eligibility criteria will be expanded to include child benefits and disability and related disability benefits.

Oil and coal fuelled systems will be phased out. This is a good move in principle to reduce carbon emissions.

First time central heating (FTCH) will be applicable to both private and social housing.

Inefficient/broken ESHs can be replaced as FTCH. All large volume, slimline and convector ESHs will be considered inefficient. However, ESHs can be installed as FTCH.

Up to 20% CERO measures can be carried over to ECO 3, but it’s not clear what savings they will be assigned.

All HHCRO measures except oil and coal boilers can be carried over from ECO2t to ECO3.

The ban on ECO-RHI blending and oil boilers will also make delivery of heating measures difficult in rural areas which are pre-dominantly off gas grid. BEIS expects these properties to receive insulation measures, but a large proportion of rural houses are solid wall construction.

Rather than using the Legislation to stop suppliers claiming RHI, it is considered to be appropriate to ban the blending and not close the avenue to promote renewables under ECO.

The qualifying boiler/ESH criteria are being replaced by broken and inefficient boiler/ESH categories.

Boilers lifetime is reduced from 12 to 3 years and ESH lifetime is reduced from 20 to 5 years. Technically this means boilers and ESHs installed in ECO1 and ECO2 can be officially replaced in ECO3 upon proving them as broken/inefficient because as per BEIS’s logic they would have lived their life.

Maximum 35,000 broken boilers can be replaced per year. This means remaining annual targets will have to be met via insulation measures, FTCH, DHS, inefficient heating upgrades and heating controls.

Inefficient heating upgrades cannot be installed without installing an insulation measure in the same property.

If a property is already insulated, it cannot receive an inefficient heating upgrade. The revised deemed scores are likely to make any installations impossible without significant contribution from fuel poor customers unless ECO rates increase substantially.

Are you an SWI installer or system manufacturer? If so, think about how quickly you can diversify your business. The solid wall minimum cap is reduced to 17000 measures per annum. However, suppliers can avoid doing any SWI by doing measures that will achieve equivalent bill savings to SWI.

RdSAP 9.93 assigns a U-value of 1.7 to all solid wall types. It is possible to achive the U-vale of 2.1 on BRE approved U-value calculators for many solid wall construction types.

The shift in pre-install U-value from 2.1 to 1.7 in my opinion can have an impact of 3 to 4 SAP points. This means a lot of properties with previously E rated EPCs may have suddenly become efficient without any intervention!!!

Suppliers can deliver up to 25% of their obligation through flexible eligibility. Note that <2% of ECO2t measures are delivered through this route. Are there enough Councils interested in participating in ECO through this route?

Installers will require registrations under Quality Mark, PAS 2035 and PAS 2030 to install ECO3 measures. Needless to say, this is besides all trainings and competency requirements under building regulations.

Up to 20% supplier obligation can be delivered through demonstration actions, innovation and in-situ measurement of performance. More details are awaited.

You have Successfully Subscribed!