What is the ECO4 Scheme?
The Energy Company Obligation (ECO), is a government energy efficiency measure for Great Britain, administered by Ofgem. It has been introduced to by the government to improve the carbon footprint of the least energy-efficient homes in the country in to attempt to reach the 2050 net-zero strategy goal.
Now in its fourth term (hence named ECO4), this version of the scheme has been introduced to support the vulnerable and most fuel poor households in the country to make their homes warmer for longer, reduce energy bills and restrict carbon emissions. Currently the ECO4 scheme is scheduled to run until March 2026 with £1b a year allocated in funding.
In short, the ECO4 Scheme aims to provide free energy-saving measures for vulnerable households to improve the energy efficiency and heating of their home. Covering a wide range of insulation and heating measures, ECO4 will continue to focus help towards low-income, vulnerable, or fuel-poor households in EPC (Energy Performance Certificate) bands D-G.
The ECO scheme is not a grant scheme, however. Payments are made directly to the installer based on the work completed in your home. At Honest Quotes, we only choose installers that we know, trust and are accredited. This means that all the work carried out will be to a high standard, making sure the improvements help you make your home more efficient for the long term.
What does this mean for me?
This means that if you live in a property that has an Energy Performance Certificate (EPC) rating of D or lower (more on this later!) you could be eligible for free home improvements that impact and improve your home’s energy efficiency and raise your EPC rating! Think of it as the government making energy companies pay to keep your home warmer for longer and to ensure the energy they provide you with (or you generate yourself) is used as well as possible.
Where has ECO4 come from?
ECO was launched in 2013 and delivered over 3.2 million measures in over 2.3 million homes. The Energy Company Obligation is now coming into its fourth term, hence the name ECO4. The four-year, final phase of the measures will be worth £1 billion a year and will run from April 2022 to March 2026.
ECO1 started on 1 January 2013 and provided funding to improve energy efficiency in difficult to treat housing and homes ‘most in need’. The obligation took over from the Carbon Emissions Reduction Target (CERT) and Community Energy Savings Programme (CESP) which both ended in 2012. ECO1 originally ran alongside Green Deal which provided loans for energy saving improvements. Having moved through ECO2 (2013 – 2015) and ECO3 (2018 – 2022) we are now in ECO4.
Under the scheme, energy suppliers are required to fund the installation of energy efficiency measures in qualifying households. The types of measures that can be installed under ECO have changed over time, and there have been a range of rules and options for UK households over the years that the scheme has operated.
How does ECO4 Work?
There are 5 simple steps to how the ECO4 scheme works…
- Check your eligibility
- We match you with a trusted, vetted installer based on your location.
- Your Installer will carry out a survey on your home.
- The installer will decide based on the survey which installation/measures are required to meet the ECO4 scheme and grant permission for the funding.
- The installation/measures are installed, and your home becomes more energy efficient.
ECO4 will continue to deliver in rural areas. There are approximately 542,000 off-gas, fuel-poor homes in England which represents just over 17% of all fuel-poor households.
Who pays for the ECO funding?
Energy companies pay for the ECO scheme, not the government (although you could argue that with the price of energy in the UK at the moment, the public are paying!). The UK government has committed to reducing carbon emissions by 2050, and one of the ways they intend to do this is by making homes more energy efficient. The ECO scheme is a major part of this plan.
If energy companies do not hit their targets for the ECO scheme, they will be penalised and the money from this penalty, in turn, will be used to fund other energy efficiency schemes.
Who is eligible for ECO4?
The government’s ECO4 scheme aims to support the least energy-efficient homes in the country, with a focus on low-income and vulnerable households.
Although the focus of the scheme is primarily on owner-occupied homes, there is support for inadequate social housing, and privately rented housing (with your landlord’s permission) available as well.
If you are on any of the below qualifying benefits, and you’re a homeowner or a private tenant, you are likely to be eligible for support via ECO4.
ECO4 is available to:
- Homeowners or Private Tenants
- Individuals who get income-related benefits
- Properties with a low EPC Rating
- Properties with inefficient heating systems
You can qualify for ECO4 if you receive certain benefits, such as:
Income Based Jobseekers Allowance
Income Related Employment and Support Allowance
Tax Credits (Child & Working Tax Credit)
For those on Child Benefit, there are specific criteria for your household income that will decide whether you are eligible for ECO4.
Single Claimant: Qualifying Maximum Household Income
– 1 Child (up to age 18) – £19,900
– 2 Children (up to age 18) – £24,800
– 3 Children (up to age 18) – £29,600
– 4 Children (up to age 18) – £34,500
Member of Couple: Qualifying Maximum Household Income:
– 1 Child (up to age 18) – £27,500
– 2 Children (up to age 18) – £32,300
– 3 Children (up to age 18) – £37,200
– 4 Children (up to age 18) – £42,000
Is anyone else eligible for ECO4?
There are alternate routes to access ECO4 funding through something called Local Authority Eligibility Flexibility (LA FLEX) which is currently only supported in specific areas.
Your local council can expand the eligibility for those who may not meet the Benefit criteria for ECO4 with ‘flexible eligibility’. The application will have to be declared eligible by local authorities.
As a general rule – LA Flex targets:
- Individuals that are living in fuel poverty
- People who are more exposed and at risk during cold weather
Your eligibility for the LA FLEX funding scheme ultimately depends on your Local Authority’s statement of intent.
If you think your local authority may be participating and you could be eligible, please get in touch.
What insulation and heating measures are available on ECO4?
We can help you with the insulation and heating measures listed below:
- Air source heat pumps (ASHP)
- Cavity wall insulation
- Electric storage heating (ESH) upgrades
- External and internal wall insulation for solid walls
- First-time central heating (FTCH)
- Flat roof insulation
- Gas boiler upgrades (for non-condensing and back boilers)
- Loft insulation
- Non-condensing boiler upgrades
- Room in roof insulation
- Solar panels
Once you check your eligibility, we’ll match you with a supplier local to you and they’ll undertake a survey on your property.
ECO4 works by prioritising the types of measures you can have installed to help you with insulation and heating. The first priority for the improvements available is to ensure that your home is properly insulated in the first instance, before then moving on to improving your heating system.
The energy efficiency improvements that are available through an ECO4 consultation are subject to specific criteria that your installer will be able to advise you on during your consultation.
What is EPC and how does it relate to ECO4?
An EPC rating quite simply put – is the energy efficiency of your property. Used by buyers or renters to gain insights into how much energy bills could cost in their new house; the EPC rating depends on two factors:
– Energy used per m2
– Carbon dioxide emissions.
The EPC rating for your home lasts for 10 years and if yours is older than this, you will need to be issued a new one before you can sell your home.
The EPC rating is important for your home for several reasons, but mostly to quickly rate your energy efficiency both for yourself to see if you can improve your energy consumption, and for prospective buyers to see how much energy bills could cost when purchasing a new property. It could be the deciding factor to a potential buyer!
EPC Requirements under the ECO4 scheme
You must have a specific EPC rating to be eligible for ECO4. To qualify, you must have an EPC rating of D, E, F or G. If your property is A, B or C, you do not qualify as your property is already well insulated and adequately energy efficient.
Where a property has an existing EPC band of F or G the grants will need to improve the rating to at least a D rating.
Where a property has an existing EPC band of band D or E the grants will need to improve the rating to at least a C rating.
The idea is that this approach will increase the number of properties awarded funding and the energy-efficiency savings achieved.
The government has stated that they aim to set a minimum target of band E, F and G properties to be upgraded so that the most energy-inefficient properties are not left behind.
It is worth noting that by 2025 every new lease property in the UK must have an EPC of C or higher.
There are a lot of factors to consider when looking into ECO4 – if you think your home could benefit from ECO4 funding, just fill in this form and see if you are eligible. We’ll do the rest!