FiT and ECO are Never Going to Solve Fuel Poverty

Kate de Selincourt

Journalist and AECB contributor Kate de Selincourt shares her personal view that energy supplier schemes like the Feed-in Tariff and the new Energy Company Obligation make the fuel poor poorer, which is no way to tackle fuel poverty! Instead, she argues, fuel poverty programmes should be removed from energy bills altogether.


Following DECC’s dramatic bringing forward of the cut to the FiT for small PVs – to a fortnight before the end of the consultation on that very cut – one of the recurring themes in the outcry was that this was a blow to the fuel poor.

But as the FiT is raised by a levy on energy bills, FiT also has the perverse impact of harming the fuel poor by raising energy prices – a point not lost on DECC minister Greg Barker. As the Minister put it in the House of Commons debate on the FiT cuts, “Yes, it is great for the few thousand who may benefit from solar panels in social housing, but what about the other 5.5 million … in fuel poverty, who will not benefit but would still face the prospect of £80 on their electricity bills?”

The FiT was never designed to be a solution for individual fuel poverty, and I find it hard to see how it ever could be. The Energy Company Obligations (ECOs) to accompany the Green Deal (GD) however are designed, at least in part, to tackle fuel poverty. But they too come from a levy on everyone’s fuel bills, and may even hit poor households harder than FiTs do (by being levied per household and not per kWh of energy supplied). But trying to load fuel poverty objectives all onto energy bills leaves a contradiction at the heart of DECC’s strategy. Expecting the fuel poor to buy their way out of fuel poverty by putting up fuel bills and thereby, increasing fuel poverty, is a massive exercise in chasing your own tail.

While there is a good case to be made that cutting energy use nationally lowers energy prices1, measures aimed  at alleviating fuel poverty  generally do not – the benefits fall elsewhere.

And there are also powerful arguments for integrating the delivery of measures (more fully, in fact, than is currently proposed under the Green Deal and ECO: we should be rolling out the highest practicable quality of home retrofits, realising significant economies of scale by working street by street, and town by town).

But  instead of having the targets for carbon and fuel poverty fighting against each other inside the same budget, wouldn’t it make more sense to raise the finance rationally, based on the financial advantage conferred – and remove fuel poverty measures from energy budgets altogether?

© 2012: Kate de Selincourt and AECB (for Terms and Conditions click here)

1See AECB’s forthcoming paper Less is More.

Download Kate de Selincourt’s article here

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