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Can you afford to ignore the Affordable Warmth Scheme?

The UK government’s Affordable Warmth Scheme (AWS) has been in place since 2013, as part of the Energy Companies Obligation (ECO).

The aim of the scheme, which was originally supposed to last until this month, was to tackle fuel poverty in the UK by replacing old boilers and storage heaters with new, environmentally friendly versions that would heat homes more efficiently, saving bill payers money.

Towards the end of 2015, it was announced that ECO would be replaced by the Domestic Energy Efficiency Supplier Obligation (DEESO) in Spring 2017. The new scheme would have a significantly reduced budget available. However, a Parliament Select Committee consultation in March 2016 criticised several aspects of the plans, calling for more ambitious targets and more funding.

In January this year, the government published the final plans for the transition from ECO to DEESO, and, in a surprising move, it was announced that ECO would be extended to September 2018:

“The government’s final position is to extend the current ECO obligation by 18 months with a greater focus on tackling fuel poverty and supporting households on lower incomes. The extension will see an increase in the size of the Affordable Warmth (AW) obligation that focuses on lower income and fuel poor households.

“The policy will also [...] increase eligibility under Affordable Warmth: Eligible pool of 4.7m households (compared to 3m at present and 4m in the consultation).”

As a landlord, you could benefit from the extended AWS if someone privately renting your property is on certain state benefits, and you have an old boiler or old storage heaters. Now that eligibility for the scheme has been widened, it might be worth checking to see if your tenants qualify.

If your tenants and property meet the scheme’s requirements, you will be given a grant that covers the cost of replacing your boiler or storage heaters, effectively giving your property a free upgrade. In light of the upcoming crackdown on energy performance certificates, as Landlord Today has already covered extensively, free upgrades to your property’s energy efficiency shouldn’t be ignored.

Alongside the legal requirements that will soon come into play, upgrading your rental property will help make it more attractive to future tenants. Environmentally friendly boilers and storage heaters will make a real difference to your tenants’ monthly bills - that’s the whole point of the AWS. New technology and a higher EPC rating can help improve the value of your property.

The value of the grant will change depending on your situation. According to the scheme’s official website, storage heater grants are ‘calculated from the results of the EPC and it may or may not cover the total cost of replacing the faulty storage heaters in your rental property.’

As for boilers, the website states that ‘the free replacement of central heating boilers is subject to a survey by a Technical Surveyor and an EPC but these are carried out free of charge.’

At present, being eligible for a grant does not guarantee that the grant will cover the full cost of new heaters or boilers. While this may change or become more flexible between now and September 2018, it is important to bear in mind for now. Still, there is no cost for checking your eligibility, and you don’t have to pay anything if you decide not to go ahead with the replacement.

With the end to ECO and the AWS now fixed in late 2018, it is worth being certain of your eligibility. With the changes to how a property’s EPC rating affects its capacity to be rented on the horizon as well, any upgrade that you can make to your property’s energy efficiency could have an important positive effect on your bottom line long-term. At the very least, it is worth being aware of the AWS and its implications.

Paul Campbell is the founder of Greenvision Energy. For more details on the AWS and how to proceed, read Greenvision’s information page

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