The Energy Company Obligation, or ECO scheme, is a government commitment to help people lower their heating costs through energy efficient home upgrades. The government requires energy companies to provide a certain amount of funding for these measures for eligible households. The obligated companies have a target based on their share of the domestic energy market in Britain. The dual purpose of the ECO scheme is to reduce carbon emissions and reduce fuel poverty.
It is our job to help you access the funding. We can check you qualify, assess your property, and install your home improvements. You could be entitled to energy efficient home improvements free of charge or at a heavily subsidised price.
The scheme began in April 2013 and has undergone several iterations. We are currently in ECO4. ECO3 ended on 31 March 2022. ECO4 began on 27 July 2022 and will cover a four year period until 31 March 2026.
According to Ofgem, the ECO scheme’s aims are to:
1. Help alleviate fuel poverty and accelerate progress to meet fuel poverty targets
2. Contribute to carbon reduction targets in the domestic sector
3. Reduce the costs of meeting the UK’s renewable energy target through promoting
more efficient energy use, and
4. Encourage innovation in the industry
What do you need to qualify for ECO4?
You will need:
- Your permanent residence to have an energy rating of E or below
Your property does not have to be on the EPC register, contact us and we can assess your rating
- And you or someone in the property must be in receipt of any of the following benefits:
Child Tax Credit
Working Tax Credit
Pension Credit Guarantee Credit
Pension Credit Savings Credit
Income-based Jobseeker’s Allowance (JSA)
Income-related Employment and Support Allowance (ESA)
You will need evidence of being on these benefits dated within 12 months.
If you rent from a private landlord or live in social housing you must have your landlord’s permission before any installations are undertaken.
What home upgrades can you get?
There are several measures available in ECO4 which each have a different effect on your property. Not all measures are suitable for every property. The ECO4 scheme has a “fabric-first” approach, meaning insulation is done before anything else. Homes with a poor energy efficiency rating must have loft, roof, and wall insulation installed before the heating system can be improved. ECO4 also employs a “whole house approach” to energy efficiency improvement, whereby multiple measures are installed.
The main measures installed are laid out below with how much money you could save per year based on the average house type in England – a 3 bed semi.
External wall insulation (EWI)
External wall insulation involves fixing a layer of insulation material to the outside walls of your house. It is then covered with render or cladding. There are various types of finish to EWI. EWI insulates your house from the outside and improves the visual appearance of your property, adding to its value. The thickness of the insulation can vary depending on which EWI system you choose. Typically, EWI will add around 100mm to your house. It provides a waterproof, protective barrier against penetrating damp.
EWI comes with a 25 year guarantee
Installation typically takes 2-3 weeks depending on the weather
Internal wall insulation (IWI)
EWI is not always an option due to costs, so IWI is the next best option. Installation involves the attachment of a framework of wooden battens (50mm deep) to the wall, and the space between the battens is filled with insulation material to keep your property warm. All wall fittings, radiators, sockets, and skirting will temporarily need to be removed.
IWI comes with a 25 year guarantee
Installation usually takes between 3-5 days depending on house size
Cavity wall insulation (CWI)
Cavity walls are formed by two walls of brickwork built close together, and between this insulation can be administered. Most homes built after 1920 have cavities, whereas older homes tend to have solid walls. There are many types of CWI for different property types, including mineral wool, bead, or foam. Some CWI materials may not be suitable for every cavity therefore a specialist survey is required. It can take half a day to conduct the initial technical survey and fill in between the bricks.
CWI comes with a 25 year guarantee
Installation takes half a day
Room in roof insulation (RIRI)
RIRI can make significant savings on your fuel bills as over 25% of the property’s heat is lost through the roof. If you use your loft as a living space then you need to make sure that all the walls and ceilings are insulated. RIRI often requires the laying of 300mm of wool or similar insulation material within the residual space with insulation boards fitted to the walls, similar to IWI. The walls will be plastered over afterward.
RIRI has a 25 year guarantee
Installation usually takes between 2-3 days depending on house size
Loft insulation (LI)
LI is an effective insulation measure that takes very little time to complete. It works as an insulator for decades. The suggested depth of fill for a standard loft in ECO4 is 270mm-300mm.
There is no mandatory requirement to issue a guarantee for loft insulation
Installation can take up to 1 day to complete
Solar photovoltaic panels (Solar PV)
The electricity produced by PV panels is renewable because it is produced only from the sun. This electricity can power any appliances that are switched on while the surplus is exported to the electricity grid or stored in a battery. You can use electricity only when you need it. When you don’t, you can also choose to sell it back to the grid. It usually requires two people to install the system.
Solar PV has a 25 year guarantee
Installation can take up to 3 days
Underfloor insulation (UFI)
UFI stops any draughts coming up from the floor. This insulation requires someone to get underneath the floor to carry out the work, so enough space must be present to have this measure installed. Most homes with a suspended floor will have an access hatch somewhere, but this may be inaccessible due to flooring or other work carried out on your property. In this case we can create a small hatch usually under a cupboard or sofa. Netting will be installed to secure the insulation in place. If there is a basement or cellar, the ceiling will be boarded once the insulation is fitted.
UFI has a 25 year guarantee
Installation usually takes a day
Air source heat pumps (ASHP)
An ASHP can provide all the heating and hot water you need. Most heat pumps do not require planning permission. An ASHP takes the air from around your home and converts it into fuel to heat your home and hot water.
Energy bill savings per year: this depends completely on your property type and pre-existing heating system
ASHP comes with a 5 year warranty on the unit and a lifetime warranty on the cylinder
It can take between 2-5 days to fit your ASHP depending on the complexity of the install
You can also get high heat retention electric storage heaters and (condensing) gas, electric, and biomass boilers on ECO4 as the scheme focuses on replacing old heating systems with greener alternatives. However, boilers will be less common than other measures. ECO3 put 134,000 boilers in British homes, but under ECO4 repairs and replacements of boilers will be limited to 5,000 per year. Currently, replacements for broken boilers or broken electric storage heaters are excluded for the private rental sector. Unlike ECO3, ECO4 also excludes the installation of oil and LPG fuelled heating systems.
How do you get home improvements if you don’t qualify for ECO funding?
Another option is funding the works yourself via monthly payments. We can help you do this because Improveasy provide consumer finance options to many home improvement companies. Please look at our main partnerships here.
The EPC registers also recommend tailored upgrades to improve each home’s energy efficiency performance. They briefly describes each measure, the typical cost, the typical yearly saving, and the potential rating after install, so you can refer to this for an idea of what your property needs and what is affordable for you.
The history of the ECO scheme
The ECO scheme has had several differing phases. ECO1 ran from 2013 to 2015, ECO2 and ECO2T ran from 2015 to 2018, ECO3 and ECO3T ended in June 2022, and was replaced by ECO4 in July 2022. ECO4 is planned to run until 2026 with funding increased from £600m to £1bn per year.
They write: “Over half of homes treated received a boiler measure and heating controls, whereas only around a third of homes have received wall insulation measures. Insulation measures are more beneficial over the long-term and are more cost effective at making progress in tackling fuel poverty.” ECO4’s fabric first, multiple measure delivery ensures homes are improved much more and will always build on the previous EPC rating of the property. ECO3 did not focus on improving EPC ratings at all. It was less suited to delivering the government’s overarching objectives of net zero carbon emissions by 2050.