No Need for Concerns Over Energy Company Obligation Grants

2 May 2013

The elderly and those with disabilities are being put off the Government’s latest energy efficiency schemes, according to unpublished research.

According to information obtained from the Department of Energy and Climate Change (DECC) via the Freedom of Information Act 2000, elderly householders and those with disabilities and long-term illness are hesitant about taking advantage of the Green Deal and Energy Company Obligation (ECO) schemes.

Fear of taking on debt and confusion over the complexity of the schemes are cited as reasons for hesitancy.

The news will be a blow to the Government as it tries to promote each scheme, particularly as these are the very groups it is looking to assist.

Debt Concerns

According to the research, older and disabled people are worried about compiling debt as a result of signing up to the Government schemes.

Under the Green Deal, householders can take out a loan to pay for energy efficient home improvements, including Cavity Wall Insulation, Loft Insulation, and boiler repair/replacement.

A Green Deal plan allows the householder to pay this loan off via their electricity bill. The scheme’s ‘Golden Rule’ means that the cost of repayment must not exceed that of the savings offered by the improvement. This means the householder will not be paying any more on their bill after improvements have been made than they did beforehand.

In addition, the loan remains attached to the property and not the individual. If the householder decides to move, they will not take the remaining debt with them.

The ECO has been initiated to further assist low-income households and geographical regions. This includes those receiving the following benefits:

  • State Pension Credit (top up to State Pension)
  • Child Tax Credit (household income under £15,850)
  • Income Support
  • Income Based Job Seekers Allowance
  • Income-Related Employment Support Allowance
  • Working Tax Credit (household income under £15,850)

Under the ECO, those qualifying are entitled to a grant to pay for Cavity Wall Insulation, Loft Insulation, and boiler repair/replacement.

Unlike Green Deal Finance, this grant does not have to be repaid.

Simplifying the Complex

Ultimately, the ECO is more straightforward than the Green Deal, and given the right information, the elderly and disabled will be able to make a more informed decision.

With the number of Green Deal assessors, providers, and other professionals increasing rapidly, the Government is hoping to get the message out to more at-risk groups, as well as the general public.

With fears that nine million homes could be plunged into fuel poverty over the next three years, and with fuel prices on the rise, the Green Deal and ECO could be an important tool to keep households warm and efficient without hitting the back pocket.

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