Will the Battle for Energy Efficiency and Lower Energy Bills Leave Mark on SMEs?

Small Business in the UK Facing Insulation Issues

When initially created, the ECO (Energy Company Obligation) was aimed to impose certain obligations to large energy suppliers in the words of energy efficiency investments, all in order of making the necessary home insulation improvements more financially bearable for an average UK household. Although originally designated to last until 2015, the scheme has been prolonged until 2017, but not without significant changes. Namely, the issue of the changes and cuts in the ECO scheme has been raised in March this year, when the Government tried to explain the new agreement that has been reached with the major energy suppliers, who agreed to lower the gas prices and thus consumers’ energy bills for £50 for, on the other hand, decreased funding obligation under the ECO scheme.

Although the Government officials have stated that the changes to the energy efficiency schemes will lead to more ECO measures helping more households and that an additional 930,000 households would be helped as a result of the government's changes, according to the statement of Greg Barker, a Tory energy minister, there have also been some other indications and concerns expressed by the Labour party Caroline Flint, the shadow energy and climate change minister. She stated that: “The government should be straight with people and admit that because of their deal with their energy companies, over 400,000 households are going to miss out on vital home improvements that would have cut their energy bills...The best way to cut people's energy bills is to invest in insulation and save the energy that escapes through our windows, walls and rooftops. But instead of making the energy companies honour their obligations, David Cameron has let them off the hook."

However, apart from the UK households missing out on insulation, in particular insulation measures that are more expensive and can cost up to £10.000 but are also more efficient on the long run (e.g. solid wall insulation), the question of the effect that these cuts will have on small business has also been raised. According to a separate report by think-tank IPPR, the cut to ECO targets may lead to 20,000 jobs lost in the solid wall insulation industry. Basically, the ECO scheme imposed some serious administrative obligations on insulation suppliers and installers who wanted to take part in the Government eco-schemes, including a series of certifications and accreditations, which can be proven to be in vain due to the fact that it is expected that instead of planned fifty solid wall insulation jobs per week, it will fall down to less than five per week, since the funding has been decreased by the energy suppliers. Some entrepreneurs have already took a stand on the matter, stating that they have already had serious expenses in order of being qualified to participate in the schemes, only to find that the cuts the Government made may lead to drastic decrease of insulation jobs, why they believe that SMEs are being priced out of the sector.

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