Home Heating Cost Reduction Scheme (HHCRO)

Created to assist those families on lower incomes wanting to reduce their energy bills, the Home Heating Cost Reduction Obligation scheme [HHCRO], is also referred to as the Affordable Warmths Obligation scheme.

This governmental scheme’s intention is fully aimed towards reducing fuel poverty in the UK. Any household that is unable to adequately heat their property at a manageable cost is defined as ‘fuel poverty’. If more than 10% of a household’s income is allocated towards heating, then that would qualify as fuel poverty.

The scheme is available to eligible families in Scotland, Wales and England.

If you or your family is eligible, assistance is not provided as a cash payout, but as funding towards a new LPG or energy efficient oil or gas boiler.

Not only will a new boiler help in heating your home more efficiently, while reducing your energy bills, you will also be reducing your current amount of carbon emissions.

If you live in private rented accommodation, are a homeowner or you are in receipt of any of the following benefits you will qualify for HHCRO funding:

  • Pension Credit
  • Child Tax Credit (with an income of £16,010 or less)
  • Working Tax Credit (with an income of £16,010 or less)
  • Income Support
  • Income-based Job Seeker’s Allowance
  • Income-Related Employment Support Allowance

If you receive Income Support, income-based Jobseeker’s Allowance or income-related Employment Support Allowance one of the following must also apply:

  • You have a child under 16
  • You have a child under 20 in full-time education (not university)
  • You get Child Tax Credit including a disability element
  • You get a Disabled Child Premium
  • You get a Disability Premium
  • You have a Pensioner Premium
  • You have a Work Related Activity or Support Component (with income-related Employment and Support Allowance)

If you are in receipt of Working Tax Credit one of the following must also apply:

  • You are 60 years of age or over
  • You have a child under 16
  • You have a child under 20 in full-time education (not university)
  • You have a Severe Disability Element
  • You have a Disabled Worker Element

The HHCRO scheme, now more commonly known as Energy Company Obligation (ECO), has promoted two million energy efficiency measures and has been installed in over 1.6 million homes.

The government will continue to use ECO to further its commitment to insulating both rural and low-income working households.

Due to the unyielded success of the scheme, the government has decided to extend its reach beyond the original end date of March 31, 2017.

The next phase of this scheme will be in place until the next phase commences in October 2018.

With the extension will come some new rules and guidelines that will take effect on April 1, 2017.

The key changes for this phase are:

  • Insulation and first-time central heating can now be funded through HHCRO in Social Housing for properties with an EPC rating of E, F or G, regardless of benefits eligibility.
  • A 30% uplift will be given to the Deemed Scores to improve funding allocations. (This is a result of many in the industry questioning the gap between deemed scores and the old scoring methodology.)
  • The CERO funding stream will account for the remaining 30% of activity. Energy Companies must collectively achieve savings of 7.3MtCO2.
  • The CSCO obligation will not be part of the new scheme and will terminate on 31st March 2017.
  • This phase of the scheme will employ a new Deemed Scoring system rather than bespoke assessments to determine funding allocations.
  • A 30% uplift will be given to the Deemed Scores to improve funding allocations. (This is a result of many in the industry questioning the gap between deemed scores and the old scoring methodology.)
  • There will be a ‘Solid Wall Minimum Requirement’ ensuring that around 32,000 solid wall properties will be insulated over the 18-month period (based on 21,000 per year).
  • The HHCRO funding stream will become the scheme’s primary obligation and will account for 70% of all activity. Energy Companies must collectively achieve £2.76 Billion in Life Time Savings.
  • A new ‘Rural’ requirement will be introduced to ensure that 15% of each Energy Company’s CERO obligation is delivered in rural areas.
  • Benefit eligibility for HHCRO will change slightly – all supplementary components for income-related benefits will be axed which will potentially widen the net of eligible residents, a new income threshold system will be introduced for Tax Credits and Universal Credit which differs depending on how many children are living in the property, and ‘Pension Guarantee Credit’ will now be the only Pension Credit category to be accepted.
  • There will be a 23% qualifying gas boiler cap (boilers that are classed as broken down or inefficient which currently attract favourable funding allocations). This means that only around 37,000 qualifying gas boilers will be installed throughout the scheme (based on 25,000 per year).
  • Local Authorities will be able to refer certain vulnerable residents for support under HHCRO regardless of their benefit entitlements through ‘Flexible Eligibility’.
  • For solid wall insulation projects, Local Authorities can also refer non-vulnerable residents for support through HHCRO if at least two thirds of the project consist of vulnerable residents.
  • Energy Companies can only assign up to 10% of its HHCRO obligation to Local Authority ‘flexible eligibility’ referrals.
  • Installers must be PAS2030 accredited to the most recent version of PAS (PAS2030: 2017 Edition 1). Those that hold ‘PAS2030 2014 Edition 1’ can still submit work under the scheme up until 31st May 2017, from which they must upgrade to the latest version.
  • Party Walls will have their in-use factor reduced from 35% to 15% which provides a greater funding allocation. They will also be categorised as Primary Measures and can be coupled with Secondary Measures such as underfloor insulation.
  • Energy Companies will have the flexibility to trade some or all their obligations between themselves.
  • Energy Companies will be given a three-month measure notification extension deadline for 5% of notifications per month.

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