ECO+ scheme: homes to get Government cash for home insulation

ECO+ scheme: homes to get Government cash for home insulation

Eligible households will get up to £1,500 paid towards improving their home's energy efficiency through the ECO+ scheme.

John Fitzsimons

Household money

John Fitzsimons
Updated on 5 December 2022

Energy bills are a huge concern for most of us, particularly now that the weather has turned and we are all having to use the central heating more frequently.

So it’s notable that the Department for Business, Energy and Industrial Strategy has unveiled a big money scheme aimed at improving the energy efficiency of large numbers of homes across the UK, as well as prodding the rest of us into adapting our energy use so that we can save money. 

Insulation across the nation

The Government has announced it is spending around £1 billion on improving the energy efficiency of homes that don’t already qualify for some form of state support on such upgrades.

The ECO+ scheme will see around 80% of the available funding going to households with an energy performance certificate (EPC) rating of a D or lower, as well as those in the lower Council Tax bands.

Currently, only 46% of homes have an EPC rating of C or above, which only emphasises how much work there is to be done on improving the efficiency of our housing stock.

The scheme will run from next spring, and last for up to three years. 

The money will be spent on insulating hundreds of thousands of households, such as through loft and cavity wall insulation.

It’s understood that typical insulation costs will come to around £1,500, and will be covered by the ECO+ scheme, with households saving around £310 a year on their energy bills as a result.

Making changes to your energy use

Alongside the insulation funding, the Government said it is also spending £18 million on a new public information programme, which will provide specific tips and advice on how people can cut their energy use while remaining warm during the colder winter months.

These will include promoting what the Government calls its ‘top recommended actions’, which include the likes of turning down radiators in empty rooms, draught-proofing windows and doors, and reducing the boiler flow temperature from 75 degrees to 60 degrees.

The new campaign is particularly notable after the toing and froing over whether such a campaign represented a worthwhile use of taxpayer cash during the brief Liz Truss premiership.

High energy costs here to stay?

But what’s really striking about this latest step is what the Government isn’t saying, at least explicitly.

This isn’t about reassuring people that the current situation is a blip, and that we will soon get back to ‘normal’, with more reasonable energy prices. 

To me, this is more an unspoken acknowledgement that high energy costs are here to stay, and that it’s going to be up to us as individual households to do what we can to reduce our use and keep bills at manageable levels.

There’s nothing wrong with that of course. Simply from an environmental perspective, it makes sense to want to use only as much energy as is actually necessary. 

But there seems to be an element of expectation management in this new programme ‒ energy costs are here to stay, and if you don’t want to end up getting bankrupted by your energy bills, then you will have to make changes to the way you use energy.

Here’s what you could have paid

The new campaign comes off the announcement from Ofgem, the energy regulator, of what the energy price cap is now set at.

The cap has increased substantially to its new level of £4,279, running from 1 January to 31 March.

On one level this will seem like something of a pointless exercise, as a result of the Government’s energy price guarantee which freezes the unit cost of gas and electricity.

The initial guarantee runs until April and means that the typical household would pay around £2,500 a year, substantially less than this new cap.

What’s more, while the guarantee is going up to £3,000 for typical household energy use from April, that protection will last for another year and is also a lot cheaper than the new cap.

However, the cap is useful in the sense that it demonstrates what we would be paying without that state support, what our bills would look like should that help disappear. 

If high energy costs are here to stay, then understanding what the cap would be set at ‒ even if it isn’t directly applying to our bills currently ‒ will be useful for understanding how much we are likely to have to pay in the future.

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