Government policy undermining energy saving

Government policy has driven SME businesses onto the rocks, while the ‘Big Six’ energy suppliers sail serenely on.

Ewan Jones


Last Monday, The Board of The Energy Saving Co-operative reluctantly decided to cease trading following changes announced in December’s Autumn Statement.

This is obviously a disappointing development both for myself as the Chief Executive and everyone in the wider movement who has supported us over the past two years.

It is also evidence of the failure of the current government’s energy policy however, and holds important lessons for how it needs to change if businesses such as ours are going to succeed in future.

I’m proud of much of what we have achieved. We have demonstrated a real demand from homeowners and communities to make their homes warmer and more comfortable, reducing their ever rising energy bills.

We’ve also built up a ready network of SME installers, delivering high quality energy saving improvements and creating sustainable jobs in local communities.

While co-operatives are founded on a principle of self-reliance; like any business, co-ops must attract investment capital to become successfully established. Co-operative backers need to be confident of a fertile and predicable market – however patient their capital.

The energy saving co-operative’s Board decision was largely driven by the UK Government’s dramatic relaxation of the ‘Big Six’ Energy Company Obligation (ECO) in the Autumn Statement on 5 December<>.

A Government that follows a an overnight halving of the solar Feed-in-Tariff (FiT), with a poorly designed and implemented Green Deal to replace previous carbon emissions reduction and energy saving schemes (CERT and CESP) – and then chooses not to enforce the Energy Company Obligation (ECO) funding requirement – does not create the necessary fertile environment for sustainable innovation.

All of these storms have driven SME businesses onto the rocks, while the ‘Big Six’ energy suppliers sail serenely on.

The Big mistake this Government is making is to entrust vital energy saving to oligopoly energy suppliers – whose shareholders are rewarded by selling more, not less, energy. It would be laughable if it were not true, but last week British Gas’ PR department blamed their abandonment of a 4,700 home energy saving retrofit project in Nottingham on the Government’s changes to ECO – after a year failing to deliver ECO–funded schemes, while lobbying George Osborne throughout to remove the obligation.

Energy saving is vital:

  • To the UK’s future energy security;
  • In reducing the ever rising energy bills of homeowners and occupants;
  • And in reducing our damaging impact on the climate.

The scaling back of ECO in the Autumn Statement was particularly damaging to market confidence, because it signalled the end of consensus political support for energy saving.

The next Labour Co-op Government will first need to restore trust in energy saving – breaking up the ‘Big Six’ oligopoly on the demand side (energy saving), as well as the supply side (generation and transmission), would be a great place to begin.