What could the ECO4 consultation mean for installers?

A consultation on the next phase of the Energy Company Obligation (ECO) scheme has been launched to seek views on current proposals.

The consultation sets out the Government’s plans for a four-year scheme worth £1 billion a year from April 2022 to March 2026.

ECO4 is likely to have profound implications for installers, with not only how they operate under the scheme but also which customers they can service.

Proposals suggest there will be no support for EPC band A, B and C.

There will also be a re-write of the rules around flexible eligibility which is detailed here.

A consultation on the next phase of the Energy Company Obligation (ECO) scheme has been launched to seek views on current proposals.

The consultation sets out the Government’s plans for a four-year scheme worth £1 billion a year from April 2022 to March 2026.

ECO4 is likely to have profound implications for installers, with not only how they operate under the scheme but also which customers they can service.

Proposals suggest there will be no support for EPC band A, B and C.

 

ECO4 may bring in minimum requirements

For properties taking part in the scheme, works may be subject to a minimum requirement of improvement measured by SAP score on EPC’s (Energy Performance Certificate).

Improvements required will depend on their starting EPC (Energy Performance Certificate) rating.

Properties that don’t meet the Minimum Requirement (i.e. the required EPC increase) will receive deflated scores for package measures. There will be some exemptions to meeting the Minimum Requirement for properties in E, F or G EPC bands.


ECO4 changes to funding allocations and deemed scores

Amendments are proposed to the method of producing deemed scores for properties and therefore the funding amount for measures.

The updated scoring methodology plans will be based on:

  • the difference in average annual bill expenditure between the starting SAP rating of the property (pre-retrofit) and the finishing SAP rating of that property (post-retrofit).
  • The floor area of a property

This would be evidenced via a valid pre-installation EPC or a pre-installation SAP assessment as part of PAS 2035.

For the property’s finishing SAP rating, the proposals allow any evidence considered appropriate by Ofgem, which could include a post installation EPC or post installation SAP assessment.

Measures will be packaged together for each property and scored as a package, rather than individually as in ECO3 to reflect the new PAS2035 approach.

Partial deflated scores may be given to properties found to be non-compliant with the Minimum Requirement or when a property owner cancels the works when some of it has already taken place.


Lifetime Bill Savings to be abolished in ECO4

ECO scores are no longer to be multiplied by measure-specific lifetimes for ECO4, with scores only being calculated on annual bill savings.

Measures will no longer be scored by their lifetime savings, lifetime savings will still be set and these will be used to dictate warranty periods.


Uplifts in ECO4

Proposals state that ECO4 will maintain the following uplifts:

  • Innovation Measure uplifts
  • Replacement of efficient broken boiler and electric storage heater (ESH) uplifts;
  • Off mains-gas uplifts.
  • Added to the uplifts for ECO4 will be a new Hard to Treat policy for E, F and G homes.

ECO4 will remove the LA Flex F & G non-PRS uplift and introduce new uplifts for efficient broken heating repairs, hard-to-treat issues and pay-for-performance.


Measures in ECO4

The proposal for ECO4 is aligned with the Government’s goals to achieve net zero by 2050, therefore greater emphasis has been placed on the transition to low carbon technologies.

The proposals require a whole-house approach, in line with the latest PAS 2035 legislation, providing long term energy efficiency benefits for householders.

Projects must be completed within three months of installation of the first measure being finished.