House with oil tank

Off Grid Energy Users Unfairly Penalised by Energy Company Obligation

February 17, 2014 | Market Watch: Industry News

Energy prices are rarely out of the news these days and whilst many people are calling for controls on the energy companies to reduce prices, one sure fire way home owners can reduce their energy bills is by improving energy efficiency. This can be achieved in a number of ways, but the key is to improve insulation and replace inefficient appliances such as boilers with more efficient models.

 

What is the Energy Company Obligation?

The Government recognised the need to improve energy efficiency some time ago and implemented the Energy Company Obligation scheme (ECO) in January 2013. Designed to fund energy efficiency measures in low income households and thus help reduce fuel poverty, ECO is funded by the big energy companies and can provide poorer households with a range of measures from loft insulation, cavity wall insulation or even a replacement boiler.

 

ECO Doesn’t Cover Oil, LPG, Electric or Solid Fuel Boiler Replacements

This all sounds very positive until you realise that, whilst ECO does cover insulation measures on all homes, it does not cover replacement oil, lpg, electricity or solid fuel boilers. This isn’t a problem for the vast majority of households that use gas as their main source of energy for heating and hot water, but there is a significant minority of “off-grid” homes where gas is unavailable. These households tend to be in rural areas and, certainly amongst the heating oil community, tend to be in the older age group living in older homes. As a result, ECO is actually failing to target some of the most vulnerable people in society as the elderly are often living on fixed incomes and in older homes which are more inefficient with higher energy bills.

The Energy Saving Trust estimates that a household that replaces their old G rated oil boiler with a new condensing oil boiler could save up to £305 on their energy bills per year. That is a significant saving for low income households and could reduce fuel poverty across the country.  So why isn’t this saving available to users of oil boilers?

The lack of funding leaves little choice for off-grid low income households than to stay with their inefficient boiler and, in a lot of cases, choose between heating and eating. Whilst there are other grants available, they are very location dependent with different councils offering different schemes. The only other significant grant scheme is in the form of a loan from the Green Deal but many low income households may not be able to contemplate paying off a loan.

 

What is the Government Doing to Change ECO?

BoilerJuice contacted the Energy Minister, Gregory Barker, to ask what was being done to change ECO so that discrimination against rural communities is prevented. Unfortunately, to date we have had no reply. However, MP Mike Weir who is also campaigning to bring oil boiler replacement into ECO, raised the question with Gregory Barker and the response he received in January was:

“We take this issue very seriously. We are meeting suppliers again next month and I can assure the hon. Gentleman that there will be progress. That has eluded Governments in the past, but we are determined to make progress”

So, we watch and wait with interest.

 

What Can We Do?

As the UK’s No.1. Heating oil website, BoilerJuice are very aware of how unfair ECO is towards “off-grid” energy users. We hear from customers who are angry about their inability to access funds that would actually help them reduce their energy bills.  A heating oil user who wishes to remain anonymous explained her plight to us and expressed her anger at the inequality she has experienced with regards to ECO grants for boilers.

“Equality is what it should be about. It is so unfair that one village with gas gets ECO grants (of course, one has to qualify), but the next village, possibly only a few miles away, doesn’t. The only difference is gas you win, oil you don’t.”

 

Take Action

We would strongly advise all heating oil users to contact their local MP and raise awareness amongst the political classes of this issue. You can find details of how to contact your MP here . We would also ask other official bodies such as OFTEC and HETAS to urge the Government to include “off-grid” fuel types as part of the ECO boiler replacement scheme.

We would also strongly urge everyone to sign up to the Energy Bill Revolution – a campaign to get Government to use funds raised through carbon taxes to be used to super-insulate homes in the UK.

 

 

For more information about ECO: https://www.gov.uk/government/policies/helping-households-to-cut-their-energy-bills/supporting-pages/energy-companies-obligation-eco

Find out how to save energy and find grants : http://www.energysavingtrust.org.uk/

 

 

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