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2021-08-13
news

ECO4 draft response - member feedback requested

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As reported to members on the day of its issue, BEIS has published the consultation documents for the ECO4 scheme. The scheme will run from April 2022 until March 2026 at an average value of £1 billion per year.

The main objective of the scheme is to improve as many fuel poor homes as reasonably practicable to EPC band C by 2030, with an interim milestone of band D by 2025. This will help to reduce emissions and will contribute towards the country’s net zero agenda. Some of the proposals outlined within the ‘Energy Company Obligation ECO4: 2022 – 2026’ document include:

  • continuing to target low income, vulnerable, and fuel poor households
  • giving greater support and deeper retrofit for the least energy efficient homes, requiring homes to meet new minimum energy efficiency requirements
  • continuing to mandate compliance with the fabric-first approach set out in PAS 2035
  • changing the proportion of the scheme that can be delivered through local authority referrals, and by suppliers
  • explaining how ECO interacts with other grant funding
  • seeking views on a future supplier buy-out mechanism to enable small suppliers to participate in ECO, subject to primary legislation

Elmhurst’s response

Elmhurst welcomes the release of the consultation and is now making its draft consultation response available for members for their consideration and input.

The essence of Elmhurst’s response is that we welcome the consultation and the shift it is making towards whole house retrofit.

We are very supportive that:

  • The annual budget and obligation term are to be increased which will give industry the confidence to invest
  • EPCs are to be used as a component to determine eligibility and funding levels
  • PAS 2035 is to be adopted to ensure energy saving potential is maximised and that the quality of installation is assured.

But we have concerns that that:

  • The ability to determine eligibility for funding with a PAS2035 retrofit assessment, which does not have the controls of an EPC, could be abused.
  • The use of EPCs or PAS 2035 energy assessment to determine both eligibility and the amount of funding may encourage some unscrupulous individuals to game the system. To prevent this happening the industry must work with OFGEM and Government to identify when this may be happening and quickly implement actions to prevent it
  • Whilst the deemed score methodology is the correct one to determine funding levels, the proposal is overly complex and therefore liable to contain opportunities for abuse and unintended consequences.
  • As with ECO 3, the funding mechanism is still measure-led which means the supply chain are motivated to find properties to meet their solution, and then engineer a Retrofit Plan to justify it. This needs a radical rethink as the start point needs to be a fully funded Retrofit Assessment and a Retrofit Plan, only then can the correct measures be determined. Remember “every home counts”
  • Exempting listed homes, and those in conservation areas, from achieving the minimum EPC band improvement is too simplistic. Whilst some may not be able to achieve the full two band improvement any exemption should be given on a measure by measure basis and justified by the PAS 2035 Retrofit Coordinator in the retrofit plan. Every home, irrespective of age, construction technique, condition or historical importance, is capable of being improved.
  • The current version of RdSAP is producing recommendations that are not consistent with government policy, especially in regard to heat pumps. Although this is likely to be addressed with the planned changes to RdSAP in late 2022 the transition between the two methods may cause some disruption in the process.

 

Elmhurst Energy’s Martyn Reed commented: “This proposal is great for consumers who are in fuel poverty and the whole house approach will deliver solutions which maximise the energy efficiency potential.

“This is also a fantastic opportunity for energy assessors, retrofit assessment and Retrofit Coordinators but it will also put us under the spotlight. We need to continue to review our processes to ensure that energy assessments can be relied upon and any attempts to “game the system” quickly identified and the perpetrators dealt with appropriately. We need to understand that in many cases energy assessors will have the key to funding and we all need to respect the responsibility that comes with that authority. That said, Elmhurst is proud of the scheme that it runs and we are confident that, with the improvements that we have made in the last five years, we can deliver. We are looking forward to the challenges ahead.”

Read Elmhurst’s draft consultation response 

Read the ECO4 Consultation 

Response deadline: Friday 3 September 2021 (11.45pm).

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2021-08-13
news