Calls are being made for ministers to widen the range of social housing tenants eligible for decarbonisation funding as the government announced its intention to exclude some homes from one of its flagship energy-efficiency schemes.
The Chartered Institute of Housing (CIH) has asked the government to relax the rules around which social homes are able to access the upcoming £4bn Energy Company Obligation (ECO) 4 scheme, arguing that its plans are “inconsistent” with its fuel poverty strategy.
Launched in 2013, the ECO scheme places an obligation on medium and large energy suppliers to fund the installation of energy-efficiency measures within “low-income and vulnerable households”, with suppliers being given a target based on their share of the market.
The government recently published a consultation for the fourth phase of ECO, worth £1bn per year between 2022 and 2026, which has confirmed it intends to continue to exclude a large number of social homes from receiving support.
Under the new scheme, owner-occupied homes with an energy performance certificate (EPC) rating of D or below can receive funding to carry out energy-efficiency improvements, such as insulation and the installation of renewable heating systems.
However, social homes with an EPC rating of D will only be eligible for “innovation measures” rather than more conventional methods of decarbonisation.
These innovation measures must not have been previously delivered through the ECO scheme but be able to demonstrate an improvement in energy efficiency.
Social housing with an EPC rating of E, F or G will be eligible for the more mainstream energy-efficiency measures.
Homes are given an EPC rating between A and G, with A being the most efficient in terms of likely fuel costs and carbon dioxide emissions.
The UK government has currently set a target that all social homes, alongside as many fuel-poor households as possible, are retrofitted to a minimum standard of EPC C by 2030.
Alexandra Gibson, policy and practice officer at the CIH, said: “ECO claims to target the most fuel-poor and energy-inefficient homes, so the fact that EPC band D social homes are excluded makes for an inconsistent policy.
“A large proportion of social homes fall under band D, so restricting these properties from funding options under the scheme means omitting them from simple measures that can have a huge impact on the warmth of the home, costs of heating the home, and overall well-being of the people that live there.
“We believe there should be more flexibility around the inclusion of EPC band D social homes under ECO4, in order to reach statutory targets and to ensure that more people can benefit from energy-efficiency measures, especially against the backdrop of rising energy bills.”
In its consultation, the government said that separate funding currently exists for social housing energy upgrades, such as the Social Housing Decarbonisation Fund, which the 2019 Conservative Party manifesto promised would be worth £3.8bn over 10 years.
The government recently announced the first wave of the fund, worth £160m, will fund projects being delivered up until 2023, but has failed to make any longer-term commitments.
Housing associations are currently not allowed to bid directly for the fund and must instead apply for grant as part of a local authority-led bid.
Will Jeffwitz, head of policy at the National Housing Federation, said the trade body will publish its response to the ECO4 consultation in due course.
He added: “It’s important that the various funding streams for retrofitting social homes complement each other and that housing associations are able to access funds directly.
“This is why we’re urging the government to confirm the £3.8bn Social Housing Decarbonisation Fund in the upcoming Spending Review.”
A Business, Energy and Industrial Strategy spokesperson said: “The UK government is committed to reducing fuel poverty whilst helping households play their part in tackling climate change by improving their energy efficiency.
“By increasing the Energy Company Obligation to £1bn and extending it until 2026 we are helping upgrade an extra 305,000 homes. This will help households cut £300 off their energy bills and also prevent 1.4 megatons of carbon emissions by 2032.”
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