ECO 3: the good, the bad and the frustrating

The Energy Company Obligation (ECO) is a government scheme to reduce carbon emissions and tackle fuel poverty across Great Britain. It began in 2013 and has had various iterations since then. The current policy began in December 2018 and is known as ECO3. The Department for Business, Energy and Industrial Strategy (BEIS) sets the policy direction and Ofgem act as the administrator for the scheme.

Working for an energy efficiency charity and working primarily on projects which try to eradicate fuel poverty across the country the ECO scheme is integral to my role as it is the largest pot of funding available to residents. However there are many frustrating aspects of the scheme which do not make it easy for people to access. Read on for some good and bad points about working with ECO3!

Positives of ECO3

Let’s start off with a good aspect – the criteria for a household to qualify is quite wide, chances are if you’re living in fuel poverty then you should be eligible for ECO3. There are two strands, for someone in the household to be receiving a qualifying benefit (which includes most means-tested benefits) and under ECO3 has been expanded to included Disability Living Allowance and Personal Independence Payment or to be certified as ‘fuel poor’ or ‘low income and vulnerable’ by your local council. If you come under the second strand then you will need your local council’s participation with the ECO scheme.

Negatives of ECO3

This is a drawback to the scheme, unfortunately it is not compulsory for every council across Great Britain to be involved with ECO and means that for some people, you may be technically eligible for funding but if your local council does not participate in the scheme then you may miss out – making it somewhat of a postcode lottery. Fortunately we work closely with our local councils and have enabled them all to give their residents access to the ECO scheme with support from ourselves.

Another tricky aspect of the scheme is to ascertain what can be funded and what cannot. ECO3 is the most restrictive of the iterations in my opinion. Measures such as cavity wall insulation and loft insulation are fairly straightforward to understand (the cavity walls must be untreated and loft insulation must be below 100mm). Broken gas boilers have been capped at 35,000 across the country per year so once the limit is hit the funding disappears – previously this was unrestricted. On the other hand if you have an inefficient gas boiler system this can be upgraded BUT only in properties that also need wall insulation. Under previous schemes this was allowed without the need for insulation.

Other measures have such little funding attached that most installers are unwilling to quote for the work as the customer contribution will be high and those living in fuel poverty will be unable to pay so it is not worth their time doing a quotation. And some heating systems are not included under ECO3 at all. These include heating systems such as electric storage heaters, oil boilers and LPG systems. Considering that from 2025 gas heating for new homes will be banned by the Government it seems strange that there is no funding for electric heating and little to no funding available for renewable measures.

So to end on a positive, at least there is still a national pot of funding to reduce carbon emissions and eradicate fuel poverty. This takes a little pressure off local councils and enables there to be fairly standard criteria to be eligible. This should make it easier and smoother for fuel poor residents across Great Britain.


About the author: Alison joined The National Energy Foundation in 2017 as a Households and Communities Project Officer. With a BA in English and Politics and an MA in Environmental Politics from Keele University, Alison plays a key role in the delivery of the Better Housing Better Health service andGawcott Solar – two charitable projects coordinated by The Foundation. 

If you have a question about anything in the above blog, please ask it in the comments section below.

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