Why we must include Band D social homes in the Energy Company Obligation eligibility criteria

New figures published on 29 July 2021 show an increase in supply of energy efficient homes as we ‘build back better’ from the pandemic towards a greener, cleaner future. In the 12 months to June 2021, 251,000 Energy Performance Certificates (EPCs) were lodged for new build homes, an increase of 16 per cent on the previous year, meaning 85 per cent of new homes in England and Wales are in the highest energy efficient bands with an energy rating of A or B.

But what about our current social housing stock? On average, social homes tend to be more energy efficient than homes in the Private Rented Sector (PRS), similar in both Scotland and Wales; but we still have a long way to go.

A consultation is now underway for the next Energy Company Obligation scheme (ECO4), which sets out the Government’s plans for a four-year scheme worth £1 billion a year from April 2022 to March 2026. ECO is designed to help reduce carbon emissions and tackle fuel poverty, yet while progress has been made in delivering energy efficiency measures for all types of consumers, ECO has been much less effective at delivering on the Fuel Poverty Strategy, according to the Committee on Fuel Poverty.

One thing that stands out in the most recent consultation is the continued exclusion of funding for social housing Band D properties, limiting eligibility to homes starting at Band E, F and G, but with the intention for Band D properties to continue to be eligible for Innovation Measures (IMs).

Two major concerns regarding limiting Band D homes to innovation measures are:

• The risks of innovations not being fit for purpose is particularly worrying for tenants who may not be able to afford alternatives if the technologies failed or were badly installed
• Given the limited financial resources available, funding for innovation would have to be additional to spending on technologies that have already been future-proofed and proven to be effective.

That is not to say that fuel poor household should not benefit from innovative measures, but new technologies that have proven benefits and have been carefully identified, should be installed.

It would make a huge difference to the sector if Band D social homes were eligible for funding under ECO4 if we are to reach new statutory fuel poverty targets for Band D by 2025.

As the government's COVID-related support schemes are wound down, the typical energy customer is likely to see their bill go up by £96 to £1,138 a year. Rising energy costs will have an even further impact on fuel-poor and energy inefficient households. It is argued that because social housing has the most energy efficient homes and can receive funding from elsewhere, such as the social housing decarbonisation fund, it does not need to be included in the ECO eligibility criteria. While this is true, it is worth noting that owner occupiers and the private rented sector are also able to access additional funding. With ECO’s primary focus being on support for low-income households, there must be more flexibility around the inclusion of Band D social homes. The fact that there isn't makes for a conflicting and inconsistent energy policy.