Landlords review domestic retrofit plans in face of ECO uncertainty

19th November, 2013

David Cameron’s plans to "roll back" green levies is forcing landlords to review thousands of domestic retrofit projects, threatening jobs and investment in the energy efficiency sector.

A group of social landlords, which manage three million homes, have written to the Prime Minister to express their "alarm" at his recent decision to launch a Government review into green levies on energy bills. Their letter states the "current uncertainty" over the Energy Company Obligation (ECO), a multi-billion pound scheme to insulate low income and hard to insulate homes and paid for by the energy companies, is already having a "damaging impact" on plans to upgrade housing stock and take people out of fuel poverty.

"We do not accept that measures such as ECO are the cause of increasing energy bills. Indeed they are in the front line of tackling fuel poverty and reducing its impact," the letter signed by members of the Sustainable Homes Index For the Future (SHIFT), a network of housing associations, academics and others, reads.

It goes on to say: "The current uncertainty over the future of ECO is already having a damaging impact as social landlords rethink their plans. Many of our members are considering delaying or disbanding much needed investment. This will have perverse impact, increasing fuel bills and reducing employment."

The letter, sent to Cameron yesterday, follows his statement in the House of Commons last month that "we need to roll back some of the green regulation and charges that are putting up bills." The pledge follows controversy over rising energy prices and lobbying by the Big Six energy firms to move the ECO into general taxation.

"Exceptionally worrying"
"This is exceptionally worrying for our members," said Andrew Eagles, ceo of Sustainable Homes, which runs the SHIFT network. "They’ve made deals on the basis of being able to roll out works. They have employed staff and made promises to customers."

The letter to the Prime Minister follows close on the heels of another open letter to Cameron from John Sinfield, managing director of Knauf Insulation. In it Sinfield warned of the "wholly devastating impact already being caused to the energy efficiency industry" by Cameron’s pledge.

Last week, Andrew Warren, head of the Association for Conservation of Energy (ACE), said that the fallout from the ECO uncertainty meant "not only are no new ECO-related contracts being signed, committed programmes are being withdrawn, and the power companies are now refusing to honour payment for many that have been completed in good faith – even those involved with the brokerage system."

"Stealth tax"
According to the Government own figures published in June 2012, the relatively newly launched ECO represents a potential £8 billion boost to economy. But the scheme, which makes up about 4.5 per cent of energy bills, has been described by some of the Big Six as a "a stealth tax". They say the scheme is too complicated to administer and is likely to push energy bill prices up still further in 2014.

Eagles disputes the fact the ECO is the real cause of energy prices rises, and instead says it is being used as foil by the energy companies who are facing other problems. "It use to be under previous energy saving programmes, they could hand out free lightbulbs and meet their obligations, but they are having to work harder to find homes to upgrade now and they are worried about not meeting their obligations under the ECO and being fined," he said.

Eagles said his members were not against reforming the ECO, but he said moving it into general taxation would lead to delays to the rollout of the scheme and would put it at risk of policy changes and cuts to departmental budgets.

Source: Greenwise Business News

A Policy Debate titled "What future for ECO" will be a key feature of the Opening Plenary at the Retrofit Summit, held at the Business Design Centre, London on 05 December.  This will be the first opportunity for industry experts to discuss the results of Chancellor George Osborne's and David Cameron's Autumn Statement.

To view the full programme or to book tickets to the Retrofit Summit, CLICK HERE.

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