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Energy suppliers could save up to £1.8 billion on changes to energy efficiency scheme Eco and lower than expected costs, according to a solid wall insulation trade body.
The figure, worth £15 to £23 off an annual household bill over and above the £35 returned to customers, dwarfs an estimate revealed by another industry body last week in response to a government consultation.
The Association for the Conservation of Energy (Ace) calculated energy suppliers were getting a £245 million windfall from the government’s “green levy” cuts announced last autumn. Energy companies had promised to pass on between £30 and £35 a year of savings to the average customer, but were in fact saving £45, Ace claimed.
The Insulated Render and Cladding Association (Inca), which represents installers of solid wall insulation, went further.
According to evidence supplied by Inca members, the market costs of delivering Eco were “considerably lower” than government had assumed. Taken together, these factors gifted energy suppliers between £1.1 billion and £1.8 billion of windfall savings over three years, Inca claimed.
The insulation industry has been hit hard by cuts to Eco targets, announced in the Chancellor’s Autumn Statement as part of a package to cut £50 from household bills. Solid wall insulation was subject to the biggest cutbacks, as the most expensive form of insulation.
Angela Knight, chief executive of EnergyUK, said the deal was based on “the best estimates that both companies and government could make”.
The Department of Energy and Climate Change is set to publish a response to the consultation before the summer break.
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