ECO3 funding to help in the battle against soaring energy bills

Recent warnings that energy bills for average households could reach £3000 a year signal tougher times ahead – but help could be at hand with ECO3 government funding.

ECO3 (latest version of the Energy Company Obligation) provides some UK households with funding access for energy-efficient improvements. The ECO scheme was launched nine years ago and the current version finishes at the end of this month (March 2022).

The good news is that the ECO scheme, which requires larger domestic energy suppliers to install heating, insulation or other energy efficiency measures in fuel poor or low, vulnerable or low income homes, will be extended from April until 2026. The ECO4 version will also have its value boosted from £640 million to £1 billion a year.

The scheme requires the biggest energy suppliers to install energy-saving measures in people’s homes, with a wide brief so these companies can decide which measures they offer, how much they’ll pay and choose the installers to do the work.

Energy-saving benefits

Qualifying households can work with their energy supplier to have a range of energy-saving work completed, including:

• Cavity wall insulation
• Solid wall insulation
• Roof insulation
• Boiler replacement or repair

Suppliers with more than 150,000 customers must offer ECO3 funding. The government indicates that so far, up to 900,000 eligible homes have benefited with  energy-efficiency measures.

The scheme is designed largely to help people on low incomes and those in fuel poverty, who would otherwise be unable to afford improvements such as new insulation or repairing/replacing a boiler. But there is a broad qualifying net.

ECO qualification

Under the scheme, the householder or one of the occupants must be in receipt of one of the following benefits:

• armed forces independence payment
• attendance allowance
• carer’s allowance
• child benefit (with an income threshold)
• child tax credit
• constant attendance allowance
• disability living allowance
• guarantee credit
• income-related employment and support allowance
• income-based jobseeker’s allowance.

Homes that are social housing property rated EPC Band E, F, or G or where the householder has been identified as being fuel poor or vulnerable to the cold under a Local Authority Flexible Eligibility Statement of Intent, also qualify.

Energy companies can also cover costs of connection to district heating systems and for fitting of heating controls. There is a simple online process at Simple Energy Advice to check if you’re eligible. You can find it here.

Energy-efficiency survey

If you meet requirements, you can arrange a technical survey with one of the relevant energy suppliers, they do not have to be your current energy company. The surveyor will identify the energy efficiency of your home and the possible improvements.

The energy supplier will review the survey and book installation dates with you. In some cases they may ask you to cover some of the costs.

Major suppliers in the scheme include:

• British Gas
• Ecotricity
• EDF Energy
• Eon
• Octopus Energy (including Co-Op Energy)
• Outfox the Market
• Ovo Energy (including Boost and SSE)
• Scottish Power
• Shell Energy
• So Energy
• Utility Warehouse

Ofgem administers the Eco scheme on behalf of the Department for Energy, Business & Industrial Strategy (BEIS). It’s duties include:

• allocating a proportion of targets to obligated suppliers
• monitoring supplier progress and deciding whether they’ve achieved their obligations
• reporting to the Secretary of State
• auditing, ensuring compliance and preventing and detecting fraud.

BEIS sets the overall policy for the scheme.

Reduce energy bills

Remember, even if you don’t qualify for the scheme, there are some easy steps you can take to reduce your energy usage and help with those rising bills. It’s definitely worth replacing old lightbulbs with LED versions. These can reduce energy consumption by up to 90% and they last for more than a decade with average use.

By fitting an eco shower head you can reduce your water use by 60% and that helps to reduce the energy used in heating and pumping. If you’re on a meter, your water bill should be a lot less. Don’t forget to look at heating controls and smart plugs as well.

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