What is the ECO scheme?

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.

ECO Flex is an offshoot of ECO4. Where ECO4 targets people on benefits, ECO Flex targets many other households. Flex is local authority specific – we are currently the only installer for Flex across Manchester, Stockport, and Trafford. You can get all the same home upgrades on both schemes, but learn more about the ECO Flex scheme here!

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

Who qualifies for ECO?

So, who qualifies for an ECO grant? You will need both of the following:

  • Your permanent residence to have an energy efficiency rating of E or below

You can find your home’s energy efficiency rating here for England, Wales, and NI

And here for the Scottish EPC register.

(However, your property does not have to be on the EPC register, contact us and we can assess your rating. There is also some funding available for D rated properties for homeowners.)

  • And you or someone in the property must be in receipt of any of the following benefits:

Child Tax Credit

Working Tax Credit

Universal Credit

Pension Credit Guarantee Credit

Pension Credit Savings Credit

Income Support

Income-based Jobseeker’s Allowance (JSA)

Income-related Employment and Support Allowance (ESA)

Child Benefit

Housing Benefit

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.

How do I access ECO funding?

If you think you qualify for ECO4, call us today on 0800 024 8505 Option 1.

ECO Flex

If you are not on benefits, you may still be able to qualify for ECO Flex. On this scheme you can receive the exact same home upgrades, though the qualifying criteria is different.

What home upgrades can you get?

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, floor, or wall insulation installed before the heating system can be improved. This is so the house retains heat more efficiently and the heating system does not have to work as hard to heat the property. ECO4 also employs a “whole house approach” whereby multiple measures are installed. Not every measure is suited to every home.

The main upgrades 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 home. It is then covered with render or cladding. There are various types of finish to EWI. EWI insulates your home 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 home. It provides a waterproof, protective barrier against penetrating damp.

Energy bill savings per year: £465

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. 

Energy bill savings per year: £465

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 several types of CWI 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.

Energy bill savings per year: £395

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. 

Energy bill savings per year: up to £480 depending on the amount of pre-existing loft or roof insulation present

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. 

Energy bill savings per year: up to £480 depending on the amount of pre-existing loft or roof insulation present

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.

Energy bill savings per year: Around £400

Solar PV has a 25 year guarantee

Installation can take up to 3 days depending on the weather

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. 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.

Energy bill savings per year: £110

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

Other measures

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 boilers will be limited. 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?

If you don’t meet the qualifying criteria for ECO4 there are several alternative forms of government funding you could fit the criteria for. These are outlined here.

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 describe each home upgrade, 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

ECO 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. 

In a publication from 1 April, the Department for Business, Energy and Industrial Strategy (now called the Department for Energy Security and Net Zero) outlined the lessons learnt from the last scheme: ECO3.

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 objective of net zero carbon emissions by 2050.

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