Changes to the Energy Company Obligation

Are the changes to ECO a correct call?

Any cut to potential investment will have a negative effect to the desired outcomes. The outcomes here being better insulated properties in the UK and overall cut to carbon emissions.

To be honest, the watering down of the solid wall insulation target is a big a let-down, not just to the end consumer who may have to wait longer to get on with their solid wall insulation priority list but also to this ‘fledgling’ industry, which is yet to get off the ground.

Cavity wall insulation costs have fallen over the last 10 years because the industry has grown to a large scale enabling the delivery of the measure to be done efficiently.

While it is impossible to say whether solid wall insulation costs will fall by 90% in the next 3-4 years as a result of ECO, since there are so many solid walls in the UK – it is imperative that this industry does grow. Insulating these properties will be absolutely paramount in the years to come to reduce our energy demand.

There has also been an apparent shift in policy – so proposals for funding some elements of the ‘social & environmental’ subsidy like the Warm Home Discount out of general taxation may on the face of it seem like a good idea, as the taxation system is more progressive that the system of paying utility bills, which is a function of ‘need’ as oppose to an individual’s income level. The Government has also recently back-tracked on infrastructure by stating that the A14 toll-road will now be cancelled and paid for by the tax payer.

What this means is that if resources have to be prioritised and elements like energy and infrastructure have to be funded by taxation rather than the consumer, the money will have to come from somewhere – either by taking resources from elsewhere or raising taxes across the board.

The ECO together with the Green Deal started off as ambitious policies but have taken many big hits along the way. What we need is certainty and not chopping and changing every few months, because this will hamper the UK energy sector being able to move with the times.




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