The Energy Company Obligation, otherwise known as ECO, has held the goal of making homes in the U.K. more energy efficient while also tackling issues such as fuel poverty and environmental safety and conservation.
Developed in 2013, the government-funded scheme has made considerable improvements to the home energy landscape, making more than 3.1 million home improvements.
As the next and final phase of ECO (ECO4) begins, it is important to know the overall goals of ECO, specifically ECO4, the benefits for energy companies and consumers alike, who is eligible for ECO phases such as ECO4, and how you can apply for ECO4 today.
A U.K. government scheme, the Energy Company Obligation (or ECO), requires that energy suppliers fund the installation of energy-efficient measures in qualifying homes across the U.K.
Over the years, the rules and regulations for ECO have changed, leaving more options for homes in the U.K. to qualify for the installation of these energy-efficient measures.
ECO has evolved through four phases since 2013.
- ECO1 ran from 2013 to 2015
- ECO2 and ECO2T ran from 2015 to 2018
- ECO3 and ECO3T ended in June 2022
- ECO4 began in July 2022 as the final iteration of the scheme and is set to run until 2026 with a funding increase of over £400M.
While the government is responsible for the ECO scheme in each phase, the government is not responsible for funding the energy efficiency measures.
The government is committed to ensuring a future of environmental sustainability through the reduction of carbon emissions by making homes more energy efficient over time. This is achieved by regulations imposed on energy companies. By requiring the big six energy companies to do their part, the energy efficiency of homes will improve.
Energy companies are required to meet certain target points in the drive for energy efficiency. If these targets aren’t met successfully in the allotted time frame, the energy companies pay a penalty fine to the government. This money, in turn, is used for future energy efficiency and sustainability efforts.
Benefits of the ECO Scheme
With the overall goal of improving energy efficiency and improving environmental efforts across the U.K., energy companies and consumers alike can benefit from ECO carbon reduction targets met by energy companies can help them leave their mark on the move to increased efficiency as well as reduce their penalty fines.
Under the Home Heating Cost Reduction Obligation (HHCRO), installing insulation or an upgraded heating system for low-income, fuel-poor, or vulnerable households will help energy companies meet their target measures.
As a consumer, the ECO scheme can improve the energy efficiency of the home, reducing energy bills and helping to save over time.
ECO4: What You Should Know
As the final phase of the Energy Company Obligation grant scheme, ECO4 aims to help low-income households increase their homes’ energy efficiency while also reducing their energy bills. This is very beneficial for those struggling to maintain regular energy bill payments. Alongside lower bills, the phase also aims to reduce fuel poverty and carbon emissions.
The overall ECO scheme helps homeowners who receive government benefits or have high fuel costs compared to their household income. Your zip code can also be a contributing factor in determining whether you are eligible for the grant.
Over the four-year span of ECO4, it is estimated that over 450,000 homes will be upgraded to improve energy efficiency. This will help improve each home’s EPC rating as well.
According to the ECO4 scheme, households that qualify could see household bills reduced between £290 and £1600 per year.
In moving forward with ECO4, the government will be able to help low-income and vulnerable households power their homes and help the U.K. reach its net zero by 2050 goal.
New in ECO4
Under ECO3, energy companies that serve more than 150,000 domestic customers were required to support eligible grant applicants. While this holds true for ECO4, there are some new stipulations.
With ECO4, the government seeks to eliminate the obligation threshold. This will allow smaller energy companies to participate in the energy efficiency movement.
Eligibility criteria have also been reevaluated with ECO4. While the scheme targets low-income, fuel-poor, and vulnerable households, the ECO4 statistics show that more than 45% of fuel-poor households have not yet received the energy efficiency benefits supported through the ECO scheme.
To further promote efficiency efforts, the government has stated that it will “expand and reform local authority flexibility so that suppliers can deliver up to 50 per cent of their obligation via that route.”
Some government benefits, however, were also removed from the eligibility list, moving from ECO3 to ECO4. These include:
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Attendance Allowance
- Carer’s Allowance
- Severe Disablement Allowance
- Industrial Injuries Disablement Benefit
- War Pensions
- Mobility Supplement
- Constant Attendance Allowance
- Armed Forces Independence Payment
What ECO4 Covers
There is a range of home improvements available through ECO4 that can improve the energy efficiency of your home (provided that you are eligible).
Fabric-first is the approach of ECO4, meaning that energy companies can seek to improve the workings of a home itself before venturing into installing new heating systems.
Under ECO4, any eligible home with an EPC rating of D or below must install loft, roof, or exterior-facing cavity wall insulation before upgrading any existing heating system. ECO4 aims to carry out more than 22,000 solid wall insulation (SWI) installations, each year of the phase.
Repairing Existing Systems
Upgrading existing heating systems in low-income or vulnerable homes comes with a price for energy companies. However, if the existing heating system is intact and under its lifespan, there is no need to replace the boiler entirely.
ECO4 incentivises repairing existing systems where possible. For example, repairing already efficient gas boilers that have a parts issue saves both time and money.
Choose Simply ECO for Your Boiler Replacement and Maintenance Needs
If you are looking to reduce your heating bills with an efficient boiler or are seeking tips on how to extend the life of your current boiler, look no further than Simply ECO Ltd.
Simply ECO Ltd. was established to assist people in fuel poverty to gain access to Carbon Saving and Energy Efficiency Measures. Being a Green Deal Approved Installer means working through our panel of approved funders. We can assist consumers in fuel poverty to access government grants to carry out home energy efficiency improvements and carbon reduction measures.
With over 6000+ boilers installed since 2014, we are the largest installer of boilers in Birmingham and surrounding areas. Contact us to get started on reducing your heating bills today.