Is the ECO enough?

Published:  22 May, 2018

BEAMA asks whether the Energy Company Obligation is doing enough to drive the uptake of heating controls.

The government has recently been consulting on proposals for the latest Energy Company Obligation (ECO) scheme, which will run from October 2018 until March 2022. The scheme requires energy suppliers to deliver energy efficiency and heating measures to homes, with the focus on helping households to keep their homes warmer, reduce their energy bills and reduce carbon emissions.

The particular aim is to reduce energy bills for low income and vulnerable households and, to a large extent, this is now the main way that such households can access financial support for measures that used to be available through central government funded schemes such as Warm Front. It is also worth noting that Warm Front, at its peak, provided total funding of just under £400 million per year, whereas this new round of ECO will run at an average cost of £640 million per year, so it’s quite substantial.

The government’s aims for ECO are not just to save energy. They are also looking to support skilled jobs in small and medium businesses, and to support innovation in product manufacturing and installation, providing a route to market for innovative technologies. On this basis it should be a very positive piece of legislation for the heating industry, though that will of course depend upon the implementation. One of the noticeable aspects of the scheme as described in the consultation is that it will continue to focus on insulation, but with an allowance for up to 35,000 replacement heating systems per year.

The Department for Business, Energy and Industrial Strategy produced statistics which show that 184,000 ‘heating controls’ measures had been installed under the scheme up to the end of March 2017. On the face of it, this is a positive outcome with a reasonable number of heating controls measures taken up, but given that there were over two million measures installed in total, this still represents a relatively small proportion given their role as a key, cost-effective energy saving measure.

An interesting element in the ECO statistics is that the number of heating controls measures installed is just 40% of the number of replacement boilers. It would normally be expected that controls would be upgraded at the same time as a boiler is replaced, so perhaps the recording of these is included as part of the boiler replacement rather than as a separate heating control measure? Even if this is the case, it seems a bit disappointing if opportunities are not taken to upgrade the controls beyond the minimum standards.

In particular, the installation of TRVs is only recommended as ‘good practice’ in the Building Regulations despite being a great opportunity to provide better comfort and lower costs for the occupants. As measures delivered under ECO are being determined by government legislation it would be a good step forward for the future if boiler replacements had to follow good or best practice levels (as defined in Part L of the Building Regulations) rather than just minimum standards.

One aspect of energy efficiency that is often neglected is the need for measures to work in combination to deliver the best savings. This is particularly true of heating controls with insulation where the controls are needed to stop homes overheating after insulation is installed, something that could potentially reduce the expected energy savings. The new proposals for ECO do suggest that innovation can include “new ways of installing existing measures or combinations of measures which, for example, reduce cost, improve quality, and enhance the overall experience for the consumer.”

This is encouraging, but a more positive step would be to make it a requirement that insulation improvements are accompanied by steps to ensure adequate control of room temperatures.

There are some positive messages for heating controls in the proposals for the future of ECO in that they remain as an energy efficiency measure that can be applied without being limited in the way that boiler replacements are. In addition, the section on innovation includes “devices and controls that improve a consumers’ ability to manage their energy use”.

We hope that this time around ECO will truly reflect the importance of good heating controls, making them a key factor in delivering real energy savings.