A little welcome news was hidden amongst the small print of the Growth Plan 2022 which was presented by new Chancellor Kwasi Kwarteng in his "mini-budget" on September 23rd 2022. Included withing the plan is an intention to expand the current ECO (Energy Company Obligation) grant scheme by injecting an additional £1 billion into it from April 2023 and spread over the ensuing three years.

On top of that was an announcement that it would shortly open up applications for up to £2.1 billion of additional support to help local authorities and housing associations invest in energy efficiency measures and renewable forms of heating. This additional funding is aimed at schools and hospitals as well as social housing.

SWIGA welcome this news and continue for support to be further extended.

To clarify exactly what this announcement really means INCA have published a summary (provided by the EEIG) of the key points published in the Plan and the potential impact to both the solid wall insulation market and the wider energy efficiency industry as a whole: as follows:  

 

• The new obligation will be made up of two parts. At least half the expansion will maintain the current focus on low-income households, with increased focus on referral routes to reduce search costs, while relaxing requirements to allow installations of low-cost single measures (e.g. loft and cavity wall insulation and heating controls). This will remain fully funded for households. The second part will broaden support, and will look to provide up to around £1500 discount on energy efficiency improvements for the least efficient homes in lower council tax bands. As with previous schemes, the government will work with the Scottish Government on arrangements in Scotland.

 

• The expansion of the scheme is expected to cost around £1bn over three years, and will be additional to current funding. We have tried hard to balance the political ambition to support households to improve their energy efficiency and lower bills as soon as possible, with the need to consider supply chain capacity and consumer uptake.

 

• The new obligation will be funded in the same way as the current ECO, with Ofgem determining the appropriate allowance in the price cap for suppliers to recover their costs. However, the Government will maintain the same fixed unit price of energy under the Energy Price Guarantee, meaning any increase over the next two years will be funded through this scheme – alongside other ‘green levies’. The future of policy costs from 2024 (when the EPG Is currently due to end) needs to be considered in the round, including full consideration of the impact of consumers. However, by setting a 3 year obligation, we wanted to give certainty to the sector now to scale up and deliver over the three years.

 

• BEIS will be publishing a consultation setting out further details, in the coming months, led by Olivia Haslam’s team. As with previous schemes BEIS will look to engage with fully, with all parties (including SWIGA) ahead of publishing the consultation.

 

• In addition to this, the existing funding for energy efficiency will continue, with the next £2.1bn round (including social housing, HUG and PSDS) due to open in the next couple of weeks.

For anyone wishing to study the Growth Plan 2022 the full details can be accessed on the Government website: https://www.gov.uk/government/topical-events/the-growth-plan