The Affordable Warmth Scheme (AWS) is one of the lesser talked about initiatives of the UK Government, thought it’s been around since 2013. The scheme falls under the umbrella of the Energy Companies Obligation (ECO), an initiative that requires UK energy companies to pay into a fund that can be used to tackle fuel poverty in the UK. Importantly, the energy companies paid for this by adding a little extra onto consumer energy bills.
The AWS primarily uses this money to help fuel poor people replace faulty storage heaters and boilers with up to date, energy efficient models. In this way, it is supposed to save these people money on their energy bills, and raise their standard of living.
However, in the latter half of 2015, the government announced that the Domestic Energy Efficiency Supplier Obligation (DEESO) would take over from ECO in early 2017. This announcement caused consternation among the public, as a key element of DEESO is that it will have a lower budget, so as to reduce the amount that energy companies pay, thereby reducing the energy bills of consumers.
Objections to the plans did not end with the public and the media; a Commons Select Committee was established to look into the proposed changes, and their outlook was resoundingly negative. They argued that DEESO would not do enough to help the Government reach its fuel poverty targets, and that ECO should be extended to allow for greater ambition in this regard.
The Government accepted the committee’s proposals, and announced their final position earlier this year. They promised to extend ECO until September 2018, and actually increase the amount of funding available and the amount of people that would be eligible for the AWS from 3m to 4.7m.
The AWS has important implications for landlords that mean that its extension to September 2018 could be important news. To check for eligibility, the scheme looks at the benefits that a property’s occupiers are on, and the quality of the heaters and boilers already in the property. If the requirements are met, they will give out a grant for new heating appliances, even if the tenant is only renting the property.
This means that, regardless of your personal level of income, you could receive a grant to cover some or all of the cost of new heaters or boilers if you have a private tenant on certain benefits. Not only would the new appliances save money for your tenant (that’s the whole idea of the AWS), they would also increase your property’s energy efficiency.
Energy efficiency is a matter of particular importance at the moment, given the legal requirement for most privately rented properties to have a minimum EPC rating of E by Spring 2018. With this in mind, the additional energy efficiency afforded by new smart storage heaters and boilers could be a big boost, especially if you can get them for free on grant money.
Even if energy efficiency is not your primary concern, the AWS still provides tangible benefits to your tenants’ standard of living and to the rental potential of your property in the future. People are increasingly looking for homes with this sort of tech, either out of concern for the environment or concern for their budget, and being able to say that your property has the latest in green heating could swing a potential tenant further down the line, or allow you to let out your property for more.
It must be said that the grant won’t necessarily cover the cost of replacing your heaters or boiler. Whether you get a full or partial grant depends on the circumstances of your tenant and property. In general, larger properties are more likely to receive full grants than smaller properties, as a factor in grant calculation is how much the bill payer will save through the new technology.
However, there is no reason not to see if your tenants and properties qualify, and to see how much you could receive in grant money. The calculation and application process is free, and the scheme will not charge you anything if you decide that you don’t want to go ahead with installation.
The bottom line is that the AWS has been extended in time and broadened in scope with the intention of handing out more grants to fuel poor households. After September 2018, it is unclear how much grant money will be available. Therefore it makes sense to look into the scheme now, and be certain about whether or not there are any grants that will help you to improve your properties in the near future.
Written by Paul Campbell, founder of Greenvision Energy. For more information about the AWS and your next steps, visit Greenvision’s dedicated information page.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.