ADE expresses alarm over rumoured changes to ECO

The government has been urged not to scrap or reduce the Energy Company Obligation (ECO) scheme.

The Association for Decentralised Energy (ADE) has expressed “serious concern” about reports that prime minister Boris Johnson and chancellor of the exchequer Rishi Sunak have discussed moves to cut, postpone or even end the ECO scheme entirely.

The trade body warned that curbing the scheme, which is due to deliver around £1 billion of investment per annum in energy efficiency and heating improvements in its fourth phase from April onwards, will derail the UK’s net zero progress.

Disruption to the scheme could also mean fuel poor households not receiving energy efficiency help as heating bills spiral and result in the failure of installers and suppliers, further undermining already brittle confidence in the sector.

ADE chief executive Lily Frencham said: “Rumours around the potential cancellation or postponement of the ECO scheme are alarming. ECO is the government’s flagship energy efficiency policy and is a critical way in which we protect vulnerable energy consumers. While it is not the whole answer, it continues to have a vital role to play. Cutting ECO now would only hurt vulnerable consumers at a time when they need more support than ever. It’s essential this doesn’t happen.”

She continued: “The investment flowing through ECO is critical to building and maintaining the supply chain that is needed to deliver net zero. A reduction or – worse yet – cancellation of ECO at this stage will decimate the industry and leave the UK even further behind on a real plan to deliver the transition.”

The call not to tamper with the ECO programme and roll out its fourth phase in April was echoed in a letter to Johnson, Sunak and business and energy secretary Kwasi Kwarteng by Gearoid Lane, chief executive of AgilityEco, which provides services to utilities to help them meet their obligations.

In the letter, Lane acknowledged concern over the impact of environmental and social levies on bills but argued that it would not make sense to interfere with ECO because it is helping those most vulnerable to the current increases in energy costs.

He wrote: “Among those costs that find their way onto energy bills, ECO is the one that is absolutely vital to preserve given that it directly tackles the very problem at hand – the impact of price rises on the most vulnerable.”

Lane said: “Cutting the ECO programme would severely impact vulnerable households, who are the worst affected by the current energy crisis. It would also jeopardise the government’s legally binding target to end fuel poverty by 2030.

“ECO is the largest retrofit scheme available to fund energy saving improvements in low-income homes yet adds less than 2% to energy bills. The heating and insulation measures that ECO provides are the only long-term, sustainable solution to energy price rises.”