Tesla Energy Services is set to lobby against the new changes under ECO and Green Deal. With an estimated 33% cut in the Energy Companies Obligation (ECO) Tesla Energy Services cannot see how David Cameron and the Government have come to their recent conclusion and actually considered this a way of tackling consumers energy bills.
With recent reports placing the estimated savings on consumers energy bills around £50, there is one glaringly obvious fact that has been overlooked here. Energy companies are putting their prices up year on year, an average of around £112 per year. Therefore, the £50 reduction will only offset against the inflated energy bills year on year.
So next year your energy bill will only go up an estimated £62, however, it will still increase. This will also mean that due to the Energy Companies Obligation (ECO) being cut by 33%, there will be 33% less insulated homes in the UK. Who has the worst carbon emissions record in the EU.
Therefore, the profits that utility companies make year on year are not being spent back into customers homes, as the Energy Companies Obligation (ECO) was first designed to do.
This means that those who fund the energy companies profits (general public) will still aide towards their profits, however will see a 33% reduced rate of return based on the amount of homes that will not be insulated with this new government plan.
David Cameron has focused primarily on the Energy Companies Obligation (ECO) as this is a very easy way of them reducing consumers energy bills, even though the current scheme will work out as follows:
£50 off your energy bills equals:
£0.96pence per week saved.
However, if we look at how much energy bills will increase the figures weigh up very differently:
£62 increase on energy bills equals:
£1.20 per week increase.
Base this also around the idea that there will be 33% less insulated homes, something that the likes of British Gas will definitely be aiming towards.
Less insulated homes mean that the occupiers pay more to heat their homes, meaning that energy bill profits rise year on year. Which ultimately leaves every consumer our of pocket under the revised obligation.
Energy Companies should not duck out of insulating the UK’s housing stock and the government should be firmly behind the general public and not dancing to the tune of Blue Chip companies such as British Gas. Who ultimately will only care about one thing, and that is year on year profit increases for their shareholders.
David Cameron has a very drastic decision to make over the coming weeks and months, does he listen to the general public and insulate the UK as was first set out under the Energy Companies Obligation (ECO). Or does he sign and dance to the tune of the multi billion pound corporations, who will never have the customer at the heart of their business plans.
Government and various politicians need yet to remind themselves, they are public servants working on behalf of the general public, not the other way around. Decisions should be made by David Cameron to insulate the fuel poor properties in the UK as best as he can. And this means insulating homes as planned under the Energy Companies Obligation (ECO).
The changes to the Energy Companies Obligation (ECO) are outlined below:
- A 2 year extension to ECO with pro rata extension of targets for CSCO and HHCRO
- A 33% reduction in CERO targets to 2015 but a pro rata increase at this lower level for 2015-17, not simply spreading the existing target over a longer period
- Re-introduction of lofts and cavities into CERO to sit along side hard to treat cavities and solid wall insulation, presumably requiring a further sub-set of CERO?
- Solid wall insulation upgrades to be reduced to 25,000 per annum but this level to be set as a minimum to give certainty that some of these works will go ahead
- District heating will now be a primary measure creating new opportunities
- A new £1000 stamp duty rebate for home buyers to spend on energy saving works and a new scheme to incentivise landlords to upgrade 15,000 of the least energy efficiency properties per annum, together worth £450m over 3 years
- A saving of around £5 on electric bills due to a voluntary reduction by network companies
- Work to be undertaken to help drive the Rural element of ECO which has not worked well this year
- Feed-in Tariffs and Renewable Obligations to remain untouched
- £60m extra this year for local authorities under the Green Deal Communities programme
- £90m of extra funding to help schools and other public sector buildings to reduce energy, possibly through interest free loans
- Measures introduced to prevent fraud around easy cavity and loft jobs.
Of particular interest was the statement that energy suppliers who miss their 2015 targets will receive an effective penalty of the same volume which will be added to their 2015-17 targets. Whilst the information around this is brief, it would appear that an energy supplier missing their 2015 CERO target by 100,000 tonnes of CO2 will still need to deliver the carbon but will have an extra 100,000 tonnes added to their 2015-17 targets.
Further announcements are promised for the Autumn Statement on Thursday followed by a consultation which will be issued in the New Year. This means that any changes which are implemented are unlikely to commence before April 2014, potentially leaving suppliers to meet their interim 2014 target before the lower cost loft and cavity measures are re-introduced.
Green Deal Installers (GDI) will be very worried at tomorrows announcement, particularly the Solid Wall Insulation installers, who may see a cut from 200,000 Solid Wall Insulation installs, to around 100,000. A massive reduction in the amount of installs and will presumedly mean the end of many Solid Wall Installers across the UK.
Something that has again been overlooked in this Autumn Statement, the government imposed the Energy Companies Obligation (ECO) to meet EU carbon emission standard, and yet now 12 months after the scheme was introduced, after heavily informing installers that Solid Wall Insulation installs were here to stay, they will see them vanish over night.
David Cameron will receive the public letter from Tesla Energy Services outlining how they feel best to tackle the Energy Companies Obligation (ECO) and the red tape surrounding the scheme in the UK.