The Energy Company Obligation (ECO) – Government Scheme - Grants and Funding

The Energy Company Obligation (ECO) is a government energy efficiency scheme in England & Wales to help reduce carbon emissions and tackle fuel poverty. The scheme began in April 2013, and in the short to mid-term, the Government has an objective to ensure that the UK has a reliable, low cost and clean energy system. This will require us to upgrade and diversify our energy supplies to meet future needs, ensuring they are smarter, cleaner, more secure and affordable for consumers and businesses. This will promote clean growth, tackle climate change and necessitate working in partnership with business and international communities.

The Energy Company Obligation helps households to reduce their energy bills, which makes them more affordable and helps to tackle climate change by reducing carbon emissions from our housing stock. The Government considers it important to bring down the costs of energy for consumers, and the Clean Growth Strategy sets out their commitments to delivering clean growth, including ensuring households have affordable energy, as well as making our buildings more energy efficient.

Improving the fabric of our homes, over the long term by insulating them, will make them more energy efficient and less expensive to heat. Furthermore, the Government is committed to homes being offered smart meters by the end of 2020. This will enable consumers to better understand their energy use and save money. Insulating homes helps to reduce our carbon emissions and contributes to meeting our carbon targets, while also allowing us to make important progress on Fuel Poverty strategy and targets.

Since the beginning of the year, I have been in contact with a company called City Energy, based in Stuart Square, Cardiff. City Energy receive ECO funding from the utility companies throughout the UK. The principal aim is to decrease the carbon output from domestic properties and reduce fuel poverty, by installing insulation and renewable heating measures in Let Residential properties.

Until 2019, the funding only targeted rural properties with occupants in receipt of benefits (pension credit, income support, child tax credits, war pension etc.). However, after some considerable hard work and effort, City Energy have developed the “Eligible Flexibility Scheme” (or Eco Flex for short) with councils in England and Wales. Eco Flex has widened the eligible recipients of Eco funding to include those in vulnerable positions or those in old energy inefficient homes. Following the introduction of the Eco Flex initiative, City Energy are now able to assist a greater number of Landlords with their let residential portfolios, by improving and modernising properties as well as providing affordable heating.

One of the most innovative ECO measures to have been introduced, since October 2018, is first time central heating, which allows for substantial grants to be obtained for renewable heat sources. These include ground source, air source and biomass boilers. Consequently, ECO funding has allowed several Estates in both England and Wales to make significant improvements to their let residential properties by accessing the grants available.

Typical grants available include:

  • Internal Wall Insulation
  • External Wall Insulation
  • Loft Insulation
  • Room in the roof insulation
  • First time Central Heating systems and renewable heating installations

Subsequently, Eco Funding has become a progressive method of tapping into grant funds to make necessary improvements to let residential portfolios, enhancing the property and most importantly improving the Energy Performance ratings (EPC) of properties. This is imperative for landed Estates, in that the Energy Efficient Regulations 2015 legislates that from 1st April 2018 no new leases can be granted if the property fails to achieve an EPC of “E” or above. Moreover, from April 2020 all let residential properties must achieve a minimum of an E rating.

The ECO funding is gauged individually on a case by case basis, with the value of the grant funding dependent upon property construction, heating type and the Tenant / occupier. Once a property has been identified which might benefit from ECO funding, it would need to be thoroughly assessed, with a detailed survey required, as there is the possibility that several measures might be applicable to the property.

With Estate budgets tightening due to the extensive cost of renovating cottages to meet the exacting regulations, then funding for insulation or first-time central heating will reduce the financial burden, especially as a number of the grants available are 100% funded through the ECO initiative.

Although hugely beneficial, ECO funding remains a relatively new concept to Farmers and Landowners, usually due to the assumption that such landowners would not qualify for Grant funding. However, ECO is based upon individual properties and those occupying the property.

If you require any assistance at all with any issues raised here, or qualification for any grants or funding, please do contact Michael.canby@butlersherborn.co.uk   01285 883740 .

Michael Canby of Butler Sherborn offers a comprehensive management and consultancy service to country estates throughout the Cotswolds and is based in the Cirencester office.

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