The government has announced reforms to its Energy Company Obligation scheme. The changes aim to make energy companies provide free energy efficiency measures to help people struggling to pay their heating bills by keeping people’s homes warmer and reducing the size of their energy bills.
“The programme as a whole is still too narrow and too small, failing to deliver bill savings to the vast majority of UK households,” said Jan Rosenow, a senior research fellow at the Centre on Innovation and Energy Demand. Rosenow responded to the government’s consultation on the proposed reforms last year.
Rosenow said that ECO expenditure was being cut from 2017 onwards from £870 million per annum to just £640 million, a 26% cut.
“Since efficiency is our lowest-cost clean energy choice, this reduction in effort is a false economy,” said Rosenow. “The government’s main argument for reducing ECO spending is affordability, as some of the costs of efficiency programmes end up in consumer bills. But since investing in cost-effective efficiency actually saves more than it costs, that arithmetic is upside-down.”
