ECO - Energy Company Obligation

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The coalition Governments Green Deal aims to establish a new market for energy efficiency measures from 2012, at the heart of which will be a new financing mechanism.

Green Deal finance will try and promote a cost-effective response to the aims on energy efficiency and place the emphasis for paying for energy efficiency measures with the beneficiary.

The Golden Rule, whereby expected savings from measures repay the costs, is key to Green Deal. There are some cases where the Golden Rule will not work but where there are strong policy reasons still to promote energy efficiency measures.

The key mechanism to support in these cases will be a new Energy Company Obligation (ECO). ECO will be entirely focussed on:

• the needs of the lower income and most vulnerable; and
• those properties needing the next most cost-effective measures that do not meet the Golden Rule – for example, solid wall insulation (SWI).

ECO will not be like previous obligations with carbon goals able to be achieved across all households. From the outset, the targets will only be achieved within a certain householder group (lower income and vulnerable households where Green Deal is less likely to work) and/or with certain property types, such as those needing SWI.

For more information on the ECO please click here.