In this blog, the TDS Charitable Foundation looks at the Government’s support for funding energy efficiency upgrades in the Private Rented Sector. Several options are available, but eligibility criteria might exclude a significant number of households needing energy improvements.
Less than a quarter of tenants eligible for the Energy Company Obligation Scheme
The Energy Company Obligation (ECO) is the most comprehensive scheme available to landlords and tenants in England, Wales and Scotland. It supports ‘whole house’ improvements, providing for various measures from insulation to upgrading heating systems. However, ECO support is only available to properties with tenants in receipt of certain benefits and which have an EPC rating of E to G.
TDS Charitable Foundation’s latest Voice of the Tenant Survey indicated that 46% of households thought that the energy efficiency of their properties could be improved. Meanwhile, the survey found that 26% of tenants are in receipt of benefits to support their rent, whilst 21% have an income below £20,000. Therefore, not all households seeking improvements would be eligible for support.
The ECO scheme does allow some flexibility for local authorities to support vulnerable households not in receipt of benefits. Those seeking help should check with their local authority to see if they qualify for support.
Complementing the ECO, the Great British Insulation Scheme provides single insulation measures. Eligibility is wider than the ECO, available for properties whose tenants might not be in receipt of benefits, so long as those properties have an EPC rating of D to G and are in council tax bands A to D.
As TDS Group indicated in a previous blog, whilst the Voice of the Tenant Survey found insulation to be the most popular upgrade amongst tenants, the Great British Insulation Scheme’s grant cap of £3,500 could be too low to support improvements most needed.
Support available in Scotland, Wales and Northern Ireland
In addition to ECO funding, landlords in Scotland may qualify for a Private Rented Sector Landlord Loan, which can provide loans of up to £17,500.
The Nest scheme in Wales offers free energy efficiency improvements to tenants in receipt of means tested benefits or in a low-income household. The home must have an EPC rating of E to G, with EPC grade D properties qualifying where a household member has a chronic respiratory, circulatory or mental health condition.
The Affordable Warmth Scheme is available in Northern Ireland for tenants with a total annual gross income of less than £23,000. It provides grant aid for a range of energy efficiency measures, such as insulation, replacement of single glazed windows and replacing some heating systems.
Wider eligibility criteria may support Government priorities
The schemes explored here mainly focus on those needing support the most. However, there will be many people just outside these groups who could also benefit from support for improving their home’s energy efficiency.
There are multiple benefits to improving energy efficiency in the Private Rented Sector. Not only is it a key way of meeting the Government’s net-zero target, it could help save significant costs to the NHS.
As such, consideration should be given to whether the eligibility criteria of these schemes should be widened and/or what additional energy efficiency support schemes should be developed to help more households in need of support and aid the Government’s wider strategic priorities.