Can the proposed future design of the Energy Company Obligation (ECO) truly work in the new PAS 2035 world?
The Department for Business, Energy & Industrial Strategy (BEIS) has just released its proposal for ECO4, replacing the currently used ECO3 and run from April 2022 until March 2026, with an average annual budget of £1 billion, funded by the energy bills of all electricity users in the UK.
The main goal of ECO4 is to get as many homes as possible to have an EPC rating of at least C. Targeting the nation’s fuel-poor homes, the end goal is to reduce emissions, assist the low-income and vulnerable, and mandate compliance with the fabric-first approach outlined in PAS 2035.
BEIS has also mandated that retrofit projects receiving government grant funding shall comply with the PAS (Publicly Available Specification) 2035:2019 process beginning in July 2021.
Within the new proposed obligations, the Energy Company Obligations typically involve large-scale single-measure shallow retrofit projects, unlike the deep whole-house retrofit required under the PAS2035 specification.
Arguably, ECO has historically offered a cost-cutter perspective on retrofit projects, a shallow retrofit to be completed on as many properties as a budget will allow without much assessment, therefore, increasing the risk of unintended consequences.
In contrast, the PAS 2035:2019 specification requires a whole house deep retrofit approach that has a long-term plan in place, stated intended outcomes, and a full retrofit assessment.
Simple fabric first energy efficiency measures that could be implemented under the ECO4 proposal, such as upgrading the properties loft insulation, becomes an ineffective and costly exercise under the influence of PAS 2035.
PAS requires lots of surveys, assessment, and coordination work, paired with potentially required physical ventilation upgrades (which many households see as pointless!), meaning a simple £800 loft insulation job may now require £2k+ of supporting assessment, coordination and ventilation upgrades!
Such bureaucracy can make it difficult to effectively deploy and implement simple energy efficiency measures across the country, impeding the race to achieve Net Zero by 2050. Unintentional consequences could result from failing to assess the true impact of single upgrades on the dwelling. The PAS2035 has a set process for accounting for and preventing this factor.
Could it be a case of buy cheap, buy twice or an entanglement of red tape that is becoming one big hindrance to retrofit projects? And can ECO4 evolve to deliver the deeper, whole-house retrofit approach required by PAS 2035?
Furthermore, could those living in inefficient social housing who make grossly disproportionate ECO contributions finally see the improvement in quality and affordable living costs they deserve?
