The Energy Company Obligation (ECO) requires large energy companies to help improve the energy efficiency of domestic homes through reducing the cost of improvement works.
What is Energy Company Obligation (ECO) 4?
ECO 4 is the fourth stage of the governments Energy Company Obligation scheme. As part of its Sustainable Warmth strategy, the government has extended the ECO grant for an extra four years, meaning it will run until March 2026.
The primary goal of the grant is to support low-income households who are unable to upgrade their homes and heating systems.
By doing this, the government will be able to help vulnerable people power their homes, whilst also assisting the country in reaching its net zero by 2050 goal. You can find out more about the ECO scheme on the Ofgem website.
What does it cover?
The scheme takes a fabric first approach through focusing on improving the building itself before installing new heating systems. In fact, any home with an energy efficiency rating between D-G will have to install loft, roof and exterior facing cavity wall insulation before improving any existing heating systems.
The governments ECO 4 report shows a specific interest in insulating solid walls, aiming to carry out up to 22,000 solid wall insulation installations each year.
Installing greener heating
ECO 4 focuses on replacing old, worn-out boilers with greener alternatives.
To ensure that the country hits net zero by 2050, the ECO 3 scheme excluded coal-fuelled heating systems. ECO 4 will be continuing with this rule, whilst also adding oil and LPG fuelled heating systems to the exclusion list.
Instead, the government will encourage people to replace their boilers with greener alternatives, namely heat pumps and biomass boilers. ECO 4 will also continue to install solar photovoltaics in all electrically heated homes.
Who is eligible for Energy Company Obligation (ECO) 4?
The governments ECO 4 scheme aims to support the least energy efficient homes in the country, with a focus on low-income and vulnerable households.
One of the main ways companies must measure who is eligible for the ECO 4 scheme is to see if the applicant receives any of the following benefits:
- Income-based Jobseekers Allowance (JSA)
- Income-related Employment & Support Allowance (ESA)
- Income Support (IS)
- Pension Credit Guarantee
- Credit Working Tax Credit (WTC)
- Child Tax Credits (CTC)
- Universal Credit (UC)
- Housing Benefit
- Pension Credit Savings Credit
The government will also make sure that anyone with additional Department of Work and Pension (DWP) benefits has access to ECO 4, regardless of whether they receive Universal Credit.
While the focus will be on primarily owner-occupied homes, this new phase of the grant will also support inefficient social housing and privately rented housing (if the landlord permits it).
Great British Insulation Scheme
The Great British Insulation Scheme (formerly known as ECO +) is a new government energy efficiency scheme designed to deliver improvements to the least energy efficient homes in Great Britain. This scheme will run until March 2026.
GBIS complements the ECO 4 scheme, yet unlike ECO 4’s ‘whole house approach’, this scheme will mostly deliver singular insulation measures.
As well as supporting low income and vulnerable households, it will also be available to those living in homes with an Energy Performance Certificate rating of D-G and within Council Tax bands A-D.
How do I apply?
Think you’d benefit from ECO 4? All you need to do is get in touch with one of the energy suppliers that are offering it.
You will then be taken through a telephone assessment, which will include answering questions about various things, including your income, whether you receive certain benefits, and your properties energy efficiency rating.
The installer will then arrange a date to visit your home and confirm whether it is suitable for the grant.
Any gas and electricity companies that have over 150,000 customers are obliged to fit ECO measures. The list of suppliers includes:
- British Gas
- E. ON
- ESB Energy
- Octopus Energy
- Outfox The Market
- OVO Energy
- Scottish Power
- Shell Energy
- SO Energy
- The Co-Operative Energy
- The Utility Warehouse
- Utilita Energy
You don’t have to approach your current energy supplier, simply opt for the company that best suits your needs.
Similarly, to ECO 3, ECO 4 allows local authorities to identify the most vulnerable households who could benefit from energy efficiency improvements. This scheme is called ECO Flexible Eligibility and is outlined in the Borough Council of King’s Lynn & West Norfolk’s Statement of Intent.
To apply for this scheme, you’ll need:
- Contact details of your ECO installer
- Supporting documents that prove you meet the qualifying criteria
- Landlord’s name, address, and contact number
If your application is successful, we’ll issue a declaration to you, or directly to an ECO installer, to allow you to access the available ECO funding.
Please note that we’re required to consult with your proposed installer/supplier in advance of a declaration being issued. A copy of your declaration will be issued to your installer/supplier directly.
Meeting the eligibility criteria does not guarantee the installation of measures. This will depend on the energy suppliers and their contractors.
Privately Rented Dwellings – Landlord Contributions
Fully funded energy efficiency improvements obtained through either the ECO 4 or GBIS schemes are issued to the occupants, however landlords will need to consent to the work and can work alongside their tenant to complete an application.
Landlords may have to make a contribution of up to a third of the total cost of the installation, however this entirely dependant on the scheme and installers in question.
All landlords are encouraged to fully liaise with the approval body, their tenants and respective retrofit installer regarding contributions.