Following the government's announcement that it will scale back the Energy Company Obligation (ECO), Alan Whitehead MP offers the scheme his support
The chancellor revealed in his autumn statement the outcome of one of the fastest “reviews” in history: the appraisal of “green levies” that was suddenly announced by David Cameron just a few weeks ago.
The problem with this review is that the different amounts that appear on energy bills as levies perform a variety of different tasks. Only some of them would truly fit this “green levy” description, such as those that underwrite wind farms and solar energy, and which were ruled out of the review.
Ironically this left the carbon floor price – a levy that doesn’t save any carbon emissions and goes straight to the Treasury – and the charges which fund programmes that help the fuel-poor to manage their energy bills and contribute to making homes more energy efficient.
So, the main recipient of the review was the Energy Company Obligation (ECO), the £1.3 billion annual obligation on energy companies to improve the performance of the most energy incompetent homes. But, if you want to save the most, permanently, on energy bills, ECO or something similar is necessary.
The UK has some of Europe’s cheapest energy prices, but also some of the highest energy bills. This is because, as a rule, we live in more poorly insulated, leakier homes. The number of energy inefficient houses is twice as high as in Scandinavia, for example.
The effects of ECO-type schemes on bills can be startling. Many homes with solid walls across the country can halve their bills through effective insulation, whereas an energy price freeze, for example, would save perhaps £72.
Of course, energy efficiency measures affect the country asymmetrically, whereas less dramatic measures spread the gain. But overall everyone will lose in the long term if we do not take seriously the energy efficiency of our homes and invest in their improvement.
