The Future of ECO is Now

25/Nov/2013
Blog Author: 
Neil Cutland

The future of the ECO scheme has been thrown into doubt after the Prime Minister has pledged to "roll back some of the green regulations and charges that are putting up bills". Let's get behind some of the numbers on these green taxes. 

Firstly, around 50% of the typical dual fuel bill of £1,200 per annum is due to the wholesale cost of fuel. Some 40% is due to transmission/distribution costs, administration, profit and VAT. Less than 10% of the bill (ie. around £100) is due to the so-called green levies. So quite clearly the levies are NOT responsible for the large increases that have been announced recently, whatever the 'big six' may be saying.

Secondly, of that £100 total levy, around half is due to the Energy Companies Obligation (ECO), which is specifically designed to reduce fuel bills and CO2 emissions in vulnerable and low income households and 'hard to treat' properties, via insulation and other measures. If ECO was in any way 'rolled back' it would have the utterly perverse effect of increasing energy bills for these consumers, with a severe knock-on effect on jobs in what should be a growth sector of the economy.

Energy costs will inevitably continue to rise and using less energy by improving the efficiency of our housing stock is the only way to protect households against rising bills in the long term. Political rhetoric is not enough, and given the disappointing take-up of Green Deal, ECO is really 'the only show in town' right now.

If you haven't already done so, I'd urge you to write to the Prime Minister and to your local MP expressing your concerns. The Government is expected to announce their decision in the Autumn statement on 5 December, so do it soon.

Neil Cutland is a director of energy efficiency and sustainability consultants Cutland Consulting Ltd.