Underfire ECO scheme still driving insulation market

The underfire Energy Companies Obligation scheme, which has been placed under review by the prime minister, is continuing to overwhelming drive the energy efficiency market, the latest official figures have revealed.

The government is currently conducting a view of green levies on energy bills after David Cameron said he wanted them to be “rolled back” as part of an effort to ease the cost of living.

It is expected to announce changes to the Energy Companies Obligation (ECO), which pays for energy efficiency measures in low income households, in the Autumn Statement on 4 December.

However, the latest official statistics published today showed that of the 311,250 measures installed across 273,000 homes through both the ECO and its sister scheme the Green Deal to the end of September, 98% - or 303,795 measures - were through the under-fire ECO scheme.

Around 33% of the ECO measures were for cavity wall insulation, 32% were for loft insulation, and 27% were for boiler upgrades.

All solid wall insulation types accounted for 4% of ECO measures.

Today the UK Green Building Council warned that cuts to ECO could cost as many as 10,000 jobs in the insulation industry.

Meanwhile, the number of completed Green Deals, where the measures are installed and the household is paying of the cost through their electricity bill, rose to 219, up from 57 last month - the most significant increase since the scheme was launched in January.

Replacement boilers accounted for 37% of measures installed using Green Deal finance, photovoltaics were 16%, heating controls were 15% and solid wall insulation was 14%.

A further 594 plans have been signed, up from 505 last month, with another 360 Green Deal plans in progress, but not yet signed.

The number of Green Deal assessments rose 20% to 101,851 through to the end of October, up from 85,177 last month.

But the figures revealed a continuing decline in the number of cashback vouchers being paid through the government’s £125m incentive scheme to support the Green Deal.

The number of cashback vouchers paid out each month peaked at 3,298 in June but has since fallen steadily since to just 459 in October, down from 953 in September, with just £2m paid out through the scheme.

Over the past year energy minister Greg Barker has repeatedly said the Green Deal will be “transformational” for the energy efficiency market.

In March, he told BBC Radio 4: “I wouldn’t be sleeping if we didn’t have 10,000 [signed up to the Green Deal] at the end of the year.”

He added: “We think we can do much, much better than that.”

Tony Howard, head of new business at CITB said: “It is encouraging to see the growth in work being delivered under the ECO scheme.

“Loft and cavity wall insulations account for almost two thirds of ECO installations to date so there are particular positives to take for firms in the insulation sector.

“Work delivered under the Green Deal has been slower and it will be interesting to see if the application numbers are affected by the current uncertainty around green taxes”

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