Government ECO Scheme Funding to replace faulty Electric Storage Heaters
ECO Scheme FAQs
What is the ECO Scheme?
ECO is an abbreviation of Energy Company Obligation, a government energy efficiency scheme. The ECO Scheme started in 2013 with the aim of tackling fuel poverty and reducing carbon emissions.
The ECO Scheme helps qualifying householders reduce their heating bills by offering grants to replace inefficient and faulty central heating boilers and storage heaters, as well as installing cavity wall insulation and loft insulation.
The government has signed up to internationally agreed carbon emission reductions to help battle climate change and the ECO Scheme is one way of achieving this.
Currently, there are two Energy Company Obligations:
- Home Heating Cost Reduction Obligation (HHCRO), better known as the Affordable Warmth Scheme. This provides grants to replace faulty and inefficient central heating boilers and electric storage heaters.
- Carbon Emissions Reduction Obligation (CERO). Under CERO grants are available to pay for the installation of cavity wall insulation and loft insulation in home which are poorly insulated.
Who qualifies for ECO Scheme grants?
There are 3 parts to ECO Scheme qualifying criteria:
1. You must live in your own home or one you rent from a private landlord. ECO Scheme boiler and storage heater grants are not available to council tenants and housing association tenants although they do qualify for insulation grants.
2. The applicant must receive at least one of the following State Benefits or Tax Credits:
- Guaranteed Pension Credit
- Child Tax Credit *
- Working Tax Credit *
- Universal Credit *
- Income-based Job Seeker’s Allowance
- Income-related Employment & Support allowance
- Income Support
Benefits marked * are subject to maximum income thresholds and more information can be found HERE.
3. In the case of Storage Heater Grants, you must have at least one faulty and inefficient electric storage heater installed in your home at the time of the free ECO Scheme survey.
How long will the ECO Scheme run for?
The current version of the ECO Scheme is scheduled to run until September 2018. However, although a decision has not been made yet, the government has signalled it’s intention to extend it in a slightly different form.
It will probably be renamed the Help to Heat Scheme with a greater focus on tackling fuel poverty.
Where does ECO Scheme funding come from?
The ECO Scheme placed a legal obligation on large energy companies to provide funding for storage heater grants and boiler grants. These energy companies include British Gas, EDF, E-on, nPower, Scottish & Southern Energy and Scottish Power. Each energy company has a target to reach for the storage heater grants they offer and if they fail to hit these targets, they can be fined.
Of course, the money actually comes from their customers in the form of a levy on every householder’s energy bill. The Government has instructed energy companies to reduce this levy in order to keep energy bills down but this in turn reduces ECO funding. As a result, some householders who qualify for a storage heater grant may have to contribute to the cost of upgrading their heating system.
Which areas does the ECO Scheme operate in?
The ECO Scheme for boiler grants, storage heater grants and insulation grants operates in England, Scotland and Wales.
Northern Ireland has its own scheme called Warm Home Grants.
Who administers the ECO Scheme?
The ECO Scheme is administered by Ofgem on behalf of the Department for Business, Energy & Industrial Strategy (BEIS). BEIS set the overall policy for the ECO Scheme.
Ofgem’s duties as regards the ECO Scheme, include:
- allocating a proportion of targets to obligated energy suppliers
- monitoring energy supplier progress and deciding whether they’ve achieved their obligations
- reporting to the Secretary of State of the Department for Business, Energy & Industrial Strategy
- auditing, ensuring compliance and preventing and detecting fraud
Ofgem can be contacted at email@example.com or on 0207 901 7000.