Middle-income households are to be eligible for grants worth up to �15,000 to make their homes more energy efficient says Grant Shapps, the business secretary.
Grant Shapps is to announce the plans for insulation grants to help households fund loft insulation, cavity wall insulation and smart heating controls, which under some circumstances (see below) will be open to landlords.
The new scheme will be called 'eco plus'�, and is to be targeted at those families in the middle income band who are unable to pay for measure that would cut their energy consumption and heating bills and as below, landlords will be eligible for some of this.
The ECO schemes
ECO is a Government programme to deliver energy efficiency measures in homes across Great Britain. ECO+ will be an addition to the current ECO scheme to deliver rapid installation of energy efficiency measures to a wider pool of households, including those on the lowest incomes and those in the least energy efficient homes in the lower council tax bands.
Energy saving campaigning
The Government is to launch a �25m publicity campaign originally killed off by Liz Truss, to encourage households to save energy this winter.
Prime minister Rishi Sunak has now given the go-ahead to fund a UK-wide public information campaign to encourage people to save energy using simple measures including turning down their central heating boilers and switching off all electrical devices when not needed and during the day time.
The campaign is likely to come before Christmas. The exact format is yet to be decided, but it will be designed to encourage people to use less energy.
This comes at this time when prices are escalated by the Ukraine war and the government is subsidising costs to the tune of tens of billions of pounds to cap energy prices.
The Government is worried that the energy situation could get far worse depending on what Putin does next.
There is currently a cap of �2,500 a per until the end of March 2023, after which the cap will move to �3,000, thereby limiting the price of energy for households and businesses for another period.
Rationale for the scheme
The Government says that Energy efficiency measures offer a significant opportunity to provide sustained support to consumers during challenges this winter and beyond, by reducing their energy bills over the longer term and making the energy system more secure and resilient to future price shocks.
At the same time, the Government wants to ensure that homes are warm and safe while achieving our net zero targets that will generate green growth and skilled jobs. The existing levels of support for energy efficiency were set when the energy prices were around half their current level.
Given the increase in energy prices and the government'�s statutory fuel poverty target for England (to ensure that as many fuel-poor homes as is reasonably practicable achieve a minimum energy efficiency rating of band C, by 2030) there is a good reason to provide further energy efficiency measures for households who previously received no support at all, as well as those on the lowest incomes.
The insulation scheme
The government has allocated �1 billion in funding from its existing budgets over the next three years to provide house insulation grants for those unable to afford insulation upgrades. The money will be made available for households falling into Council Tax bands A to D.
The grants will meet 75 per cent of the cost of upgrades. And are estimated to be available for over 70,000 homes and to save hundreds of pounds a year. This follows on the heals of a green homes grant which was pulled last year after a disastrous start, consequently this time it will be administered by the energy suppliers.
It has been estimated that the upgrades provided by this scheme have the potential to save significant amounts of energy and save householders considerable amounts on their energy bills.
For example, installing loft insulation can costs in the region of �1,000 plus but can save up to �600 per year. Cavity wall insulation costs more at around �2,500 but can potentially �500 per year. Thermostat valves on radiators and other advanced heating system controls costing around �800 can also save in the region of �500 per year.
The Government'�s aim is to reduced the average household energy consumption by 15 per cent this winter as the country grapples with the Russian led energy crisis which could escalate further. Jeremy Hunt the Chancellor has said that people will be joining a 'national mission'� to reduce 'energy dependency on what Putin chooses to do'�.
The Energy Company Obligation (ECO) has been in place since 2013 and is responsible for the installation of around 3.5 million insulation and heating measures in 2.4 million homes. ECO is an established scheme having undergone multiple iterations, with ECO4 the latest scheme, delivering �4 billion from 2022 to 2026.
A new Energy Company Obligation (ECO), ECO+, is intended to run from Spring 2023 until March 2026 at a value of �1 billion over the three years. The main aim of the scheme is to provide rapid installation of energy efficiency measures to a wider pool of households, including those on the lowest income and those in the least energy efficient homes in the lower Council Tax bands, reducing energy bills and reducing fuel poverty in the face of significant energy price rises.
ECO+ will prioritise affordable insulation measures that can be delivered on a large scale to reach a high volume of households quickly. Both pools will be eligible for single insulation measures, with the low-income group also eligible for heating controls as secondary measures.
The Government says it intends to drive consumer contributions through the general group by using ECO4 annual project scores while modelling a proportion of consumer contributions in the general group.
It proposes to continue support through the Innovation Measures route in place through ECO4 given the benefits they may offer on increased savings or ease of installation but propose that only the standard 25% uplift should be applied, and any Innovation Measure must first be approved for use under ECO4 to ease the administrative burden.
Anything for landlords?
"To avoid landlords receiving support through ECO+ when they would otherwise be able to pay in the Private Rental Sector (PRS), we propose limiting the general group to only receiving higher-cost measures which are more likely to require a customer contribution, excluding loft and cavity insulation," the official guidance says.
"Recognising the need to support the most vulnerable PRS households in the low-income group the Government proposes allowing this group to receive any ECO+ insulation measure.
"Both eligibility groups, EPC F and G homes will be excluded as in England & Wales they would be in breach of the current Minimum Energy Efficiency Standards (MEES) regulation requiring landlords to spend up to �3,500 to improve a home to EPC band E.
"For social housing in both eligibility groups, which according to the Government tend to be more energy efficient and can receive support through other schemes, it will limit homes to EPC bands E, F, and G, allowing Ds to receive only Innovation Measures.
"This will make sure the least energy-efficient homes are targeted. To ensure government money is prioritised towards insulation measures, neither PRS households nor social housing will receive heating controls."
Other Insulation grants
Insulation Grants have been and are available to the occupiers of privately rented properties as it is they who pay the fuel bills.
For tenants aged 70 or over, or for those on a state pension, or if they receive a qualifying tax credit or benefit, tenants are not likely to have to pay towards the cost of insulation.
If tenants qualify for a partial grant, it is they who should contribute the remainder. However, landlords may feel that the improvement to their property and the resale value will justify them paying the difference, whilst taking advantage of the fact that their current tenants qualify their property for the grant.
As a private landlord or property management company, your requirement is to give written permission prior to works being carried out.
Where flats are concerned it is unlikely they will be able to have cavity wall insulation installed unless all flats in the block, above and below and either side, also agree to have it fitted.