Ofgem has included an allowance for the Great British Insulation Scheme in the default tariff cap from April 2023 onwards, according to a consultation response summary published by the National Insulation Association on 27 April 20231. The scheme, previously consulted on as ECO+, was renamed to help with consumer awareness1. The cost of delivering it will be included within the Energy Price Guarantee, and the cap allowance is the mechanism for recovering that cost1.
The scheme targets two groups. The general group covers homes with an EPC rating of D to G within Council Tax bands A to D in England and A to E in Scotland and Wales; eligibility in Wales was expanded from bands A to C as consulted on1. The low-income group covers homes with an EPC rating of D to G and broadly mirrors the household eligibility requirements of ECO4, being on means tested benefits or living in the least efficient social housing1. At least 20 per cent of each supplier's annual phase target must be delivered to the low-income group, and households treated through a flexible eligibility route can comprise up to 80 per cent of a supplier's low-income minimum1.
| Element | Detail |
|---|---|
| General group | EPC D to G; Council Tax bands A to D (England), A to E (Scotland and Wales) |
| Low-income group | EPC D to G; broadly mirrors ECO4 eligibility |
| Low-income minimum | At least 20 per cent of each supplier's annual phase target |
| Measures per household | One measure in the general group; owner occupiers in the low-income group may also receive heating controls |
| Household contribution | Government assumes the general group collectively contributes £80 million, 10 per cent of the £800 million budget earmarked for that group |
Suppliers must meet at least 90 per cent of each annual phase target within that year, through qualifying measures, with any shortfall made up by scheme end, and there are no constraints on suppliers exceeding annual targets1. Ofgem is the scheme administrator1. All measures must be delivered in accordance with PAS 2035, including cavity and loft insulation in all scenarios and heating controls1. There is no requirement to improve properties by a certain number of EPC bands; the scheme focuses solely on insulation and heating control measures1.
"an allowance for the scheme has been included by Ofgem in the default tariff cap (the price cap) from April 2023 onwards"
Why it matters for households
The allowance means the cost of the insulation scheme sits inside the energy price cap that sets default tariff rates, so households on a standard variable or other capped tariff contribute to it through their unit rates or standing charges rather than through general taxation. The scheme's stated aims include tackling fuel poverty, achieving Net Zero and reducing total UK energy demand by 15 per cent from 2021 levels by 20301. For a home's energy independence, the practical effect is that eligible insulation and heating control work is funded through the bill mechanism administered by Ofgem, with eligibility tied to EPC rating and, for the general group, Council Tax band. Homes in EPC bands F and G in the private rented sector are excluded unless exempt from the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, and private rented households in the general group are only eligible for higher-cost insulation measures excluding loft or cavity wall insulation1. In Scotland and Wales, low-income off-gas households in rural areas receive a 20 per cent uplift to the score given to each measure; in England, the Home Upgrade Grant covers low-income off-gas households and has ringfenced 60 per cent of funding for rural local authorities1.
What happens next
Government planned to launch a self-referral service in summer 2023 as part of GOV.UK1. Affirmative regulations were to be laid in Parliament, expected to come into force later in 2023, with the policy subject to Parliamentary approval; Ofgem was to publish separate guidance for local authorities, the devolved administrations and suppliers, and the Final Impact Assessment was due in spring 20231. Suppliers were permitted to begin delivering measures ahead of the legislation coming into force, from the date the document was published1.