Consultation open: Energy Company Obligation (ECO3) - improving consumer protection

12/07/2019

BEIS is seeking views on proposed changes designed to improve installation standards and amend rules for some ECO measures - submit your response by 6th August 2019

The Department of Business, Energy and Industrial Strategy (BEIS) is consulting on proposed changes to the current Energy Company Obligation (ECO) designed to improve the standards of installation and amend the rules for some ECO measures. All responses must be submitted to Government by 6th August 2019. We would encourage our partners to review the consultation and respond where appropriate.

AgilityEco's key points to note:

  • From our perspective, any proposed changes that encourage quality and a marked improvement in installation standards across the industry are to be welcomed 
  • First-Time Central Heating (FTCH) is a significant weapon in the fight against fuel poverty. Widening the eligibility base and improving the funding rates to offer FTCH must also be welcomed. We encourage the many Local Authorities that we partner with on FTCH programmes to respond positively to the proposed changes
  • We understand why Government is seeking to remove the score uplift for broken boilers as part of a “dual measure” - there is a clear intention to "cap" broken boiler replacements. We note that there are many positives in relation to dual measures - stimulating innovation in new insulation measures, increasing delivery volumes and reducing costs. We would suggest BEIS adopt a careful approach here, examining market evidence in the coming months and then considering the timeline for withdrawal.


Quality Assurance and Trustmark

BEIS proposes to incorporate the TrustMark Government Endorsed Quality Scheme to ECO3 which aims to help people find reputable tradespeople to carry out repair, maintenance and improvement work to homes.

Trustmark's framework has been developed based on the recommendations from the Each Home Counts Review which covered:

  • Consumer advice and protection
  • Standards framework
  • Monitoring and enforcement.

It is intended that the administration of ECO Technical Monitoring will transfer from Ofgem, the ECO administrator, to TrustMark. The rollout of TrustMark within ECO will result in increased delivery costs and therefore an increased cost to obligated suppliers. However, Government views this as necessary to improve the quality and standards of installation and we fully support this view.

 

PAS - Publicly Available Specifications

Alongside the implementation of TrustMark, Government proposes that the following specifications should come into effect through the TrustMark framework:

  • PAS 2030:2019 – Specification for the installation of energy efficiency measures in existing dwellings and insulation in residential park homes
  • PAS 2035:2019 – Retrofitting dwellings for improved energy efficiency: Specification and guidance.

A 19 month transition window has been agreed for installers to be accredited to the standards above from the date of publication -  30 June 2019 to 31 January 2021. All installers must be accredited within this transition period in order to deliver ECO measures.

Our sister organisation Bierce is holding a workshop offering guidance on the new PAS specifications. You can find further details and register here.

 

Increased financial protection for ECO measures

TrustMark's framework will include increased financial protection for consumers on all measures delivered under ECO.  Alongside any financial protection specified within the TrustMark framework, Government is proposing that the current 25 year insurance backed guarantee requirement in place for wall insulation measures (SWI, CWI and Park Homes) should be extended to underfloor and room in roof insulation.
 

First Time Central Heating (FTCH)

There are three very positive changes proposed to this measure type:

  • Increasing the lifetime of the measure from 12 years for a boiler replacement to 20 years for FTCH. This reflects the longer lifetime of an entire heating system rather than just the lifetime of the boiler itself
  • Removing the Private Rented Sector (PRS) EPC rating restrictions, enabling FTCH to be installed within PRS F & G rated homes, reflecting its high installation cost
  • Extend Local Authority Flexible Eligibility in-fill to FTCH, enabling non-qualifying households to benefit in area-based programmes where most households are eligible.

We urge our Local Authority partners to support these above points specifically when responding to the consultation.


Boiler Replacement outside of the broken heating cap (dual measures)

Government is aiming to realign the ECO regulation to conform with the initial policy intent to "cap" broken boiler replacements. The current regulations allow boiler replacements outside of the cap, where installed alongside a primary insulation measure, to benefit from the 400% uplift solely intended for measures delivered within the broken heating cap.

However, dual measures are creating a mechanism to drive installers and surveyors to consider multiple measures, which is an important step towards the elusive “whole house approach” that will be needed as we move towards the 2030 fuel poverty and 2050 climate change targets.  Furthermore, as Government has (rightly) taken away the scope for loft insulation to be used as a dual measure, this is stimulating innovation in the supply chain with new insulation measures such as underfloor insulation being delivered in quantities not seen to date.

These measures will again be important as we strive for increasingly higher energy efficiency standards. It is also important to note that the market is only now beginning to catch up in delivering the quantities of measures required to ensure the ECO3 target is met, so taking out this popular measure at this time will make it even more difficult for the market to get back on track.

We therefore urge BEIS to adopt  a careful approach here, examining market evidence in the coming months and then considering the timeline for withdrawal.
 
AgilityEco would welcome views from all obligated suppliers/supply chain partners to discuss the implications of the above.  We are working alongside our sister company, Bierce Surveying to assist all our members with the implementation of the new standards proposed.