ECO4 Scheme

The Energy Company Obligation (ECO) is a government energy efficiency scheme that covers England, Scotland & Wales to help reduce carbon emissions and tackle fuel poverty.

The scheme began in April 2013, and over time it has been amended. The ECO3 scheme closed on 31 March 2022. The latest policy, ECO4, applies to measures completed from 1 April 2022 and will cover a four year period until 31 March 2026.

The ECO4 scheme’s main points are:

  • Supporting households on the lowest incomes. Households in receipt of means-tested benefits will be eligible. Up to 50% of the obligation target can be met under the reformed ECO4 Flex, which is designed to target households on low incomes, but not in receipt of benefits. ECO4 Flex will be voluntary for local authorities, the Scottish and Welsh governments, and obligated suppliers. The eligible pool will be at least 3.5 million homes.

  • Only energy efficiency band D-G homes are eligible for ECO4 though most energy suppliers will focus on the least efficient home ratings of E-G. For social housing and private rented accommodation, ECO4 will support the least efficient homes in bands E-G only.

  • An E, F, G minimum target, increased to 150,000 private tenure homes, pushing greater delivery to homes needing the most improvements and attracting higher scores.

  • A solid wall minimum target of 90,000 solid wall measures over the 4-year scheme.

  • A broken boiler and electric storage heating (ESH) replacement cap for efficient heating to 5,000 per year. Inefficient heating systems upgraded with efficient heating will not be subject to a cap. Repairs will be capped at 5,000 homes per year, subject to certain conditions.

  • Two uplifts for innovation, so that improvements can be rewarded and differentiated between relative and substantial improvements against standard counterparts available in the market. Demonstration actions will be removed.

  • Score uplifts of 35% in off-gas rural areas in Scotland and Wales to incentivise delivery in areas that may be harder to reach​