THE ENERGY COMPANY OBLIGATION (ECO4 AND ECO PLUS)
ECO4 AND ECO PLUS FOCUSES ON REDUCING THE UK'S CARBON EMISSIONS AND THEREBY REDUCING ENERGY BILLS FOR HOUSEHOLDS
“ECO” stands for Energy Company Obligation, which is a UK government policy aimed at reducing carbon emissions and tackling fuel poverty by improving the energy efficiency of homes in the country. “ECO4” refers to the fourth iteration of the Energy Company Obligation, which was introduced in 2018 and will run until 2022. Find out more on the Governments aims for ECO 4 here (this will redirect you to the Government website)
Under the ECO4 scheme, energy suppliers are required to deliver energy efficiency improvements to a certain number of homes, particularly those that are in fuel poverty or have a high energy usage. The measures they can offer include insulation, heating upgrades, and other measures aimed at reducing energy usage and reducing carbon emissions.
The goal of the ECO4 scheme is to reduce the UK’s carbon emissions, help reduce energy bills for households, and tackle fuel poverty by making homes more energy efficient.
Specific policies include :
- 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 eligible for ECO4. For social housing and private rented accommodation, ECO4 will support the least efficient homes in bands E-G only
- An EFG 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
- 2 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.