Delivery of insulation under the Energy Company Obligation (ECO) has stalled after internal government delays, according to analysis published by the Energy and Climate Intelligence Unit (ECIU) on 14 November 2022. The same analysis states that 18,750 low income households could miss out on measures that it says could save them £300 each1.
The ECIU report, which covers the Energy Company Obligation and the wider question of insulation and energy independence, puts the stalled delivery alongside wider figures on gas demand. It says getting many of the UK's homes up to a basic level of insulation this decade could save up to 384TWh of gas over the period 2030 to 2035, compared with 118TWh that could be produced by new "already approved" North Sea fields over the same period. That 384TWh figure is described as equivalent to a fifth (20%) of current total annual household gas demand, or 11% of gas imports1.
The report also sets out bill figures. Reaching the government's target for all homes of Energy Performance Certificate (EPC) band C could lower the total amount paid for gas in the average home, currently EPC band D, by £1,944 by the start of 2030 in a central scenario, rising to £2,469 if gas prices stay high for the rest of the decade. For homes rated EPC band F, total savings could reach £4,486 in a central scenario and £5,697 if gas prices stay high1.
On installation rates, the analysis says just 150,000 homes are expected to benefit from energy efficiency installations in 2022. At that rate, it says, just 1.2 million homes in the UK will have had insulation installed by the end of 2030, far below what is needed for the government's target of bringing the vast majority of homes up to EPC C by 20351.
"It has been reported that delivery of insulation under the Government's flagship Energy Company Obligation (ECO) scheme has stalled after internal government delays, resulting in 18,750 low income households potentially missing out on the measures that could save them £300 each"
The ECIU analysis draws its household bill figures from three gas price scenarios, using Cornwall Insight estimates. The central scenario assumes a gas unit price of 13p per kWh during 2024, falling by 0.5p per kWh per quarter after that, giving an average unit price of 9.9p per kWh until 2030 and 6p per kWh in the fourth quarter of 2029. The high price scenario assumes 13.2p per kWh during 2024, falling by 0.1p per kWh per quarter, giving 12.8p per kWh on average and 12p per kWh in late 2029. The low price scenario assumes 12.8p per kWh during 2024, falling by 0.7p per kWh per quarter, giving 8.4p per kWh on average and 4p per kWh in late 20291.
| Scenario | Average gas unit price to 2030 | Savings, EPC D to C | Savings, EPC F to C |
|---|---|---|---|
| High gas prices | 12.8p per kWh | £2,469 by end 2029 | £5,697 by end 2029 |
| Medium gas prices | 9.9p per kWh | £1,944 by end 2029 | £4,486 by end 2029 |
| Low gas prices | 8.4p per kWh | £1,715 by end 2029 | £3,958 by end 2029 |
The report also cites previous analysis that energy efficiency, including insulation, contributed 25% of economic growth between 1971 and 2013, and polling showing 82% support for the government offering financial help to make homes more energy efficient1.
Why it matters for households
The figures describe a gap between what insulation can do to a home's gas use and how quickly measures are being installed. A household that reaches EPC band C uses less gas for the same warmth, which reduces exposure to gas prices and, in the ECIU's scenarios, lowers the total amount paid for gas over the rest of the decade. For homes starting at band F, the sums involved are larger because more of the heat currently lost through the building fabric is paid for at the meter.
The stalled ECO delivery matters because the scheme is the main supplier-funded route for low income households to get measures installed at little or no upfront cost. If 18,750 households miss out, as the analysis states, those homes continue to pay for gas they do not need to use. The ECO4 scheme is the current phase of the obligation, and the benefits that qualify for energy grants determine which households can access it. Households that cannot use ECO may look at council energy grants or crisis and hardship funds, and the grants and energy independence page sets out how grant-funded measures relate to a home's overall energy position.
What happens next
The ECIU analysis sets out no dated timetable for the stalled ECO delivery to resume, and no figure for when the 18,750 households might receive measures. The government's stated target of bringing the vast majority of homes up to EPC C by 2035 remains in place1.