Energy Company Obligation (ECO4)

The ECO4 scheme (Energy Company Obligation) is a UK government-backed energy grant designed to improve home energy efficiency, cut carbon emissions, and help households save on rising energy bills. Running from April 2022 to March 2026, ECO4 focuses on low-income households and properties with poor Energy Performance Certificate (EPC) ratings across England, Scotland, and Wales.

Key Objectives of the ECO4 Scheme

Improve home energy efficiency in over 450,000 low-income households across Great Britain by 2026.
Help families achieve average annual energy bill savings of £300–£400 through ECO4 funding.
Cut lifetime CO2 emissions by more than 6 million tonnes, supporting the UK’s climate goals.
Drive the shift towards low-carbon heating systems and home electrification for a greener future.

Key Stakeholders in the ECO4 Scheme
- Energy Suppliers – Major providers such as British Gas, E.ON, EDF, and Octopus Energy are obligated to fund and deliver ECO4 energy efficiency measures across Great Britain.
- Homeowners and Landlords – Eligible properties can access ECO4 grants for insulation, heating system upgrades, and renewable energy installations to cut bills and boost efficiency.
- Local Authorities – Play a vital role in identifying households through the ECO4 Flex scheme, helping more vulnerable residents benefit from the funding.
- Ofgem – The energy regulator administers the ECO4 programme, sets supplier targets, monitors compliance, and ensures fraud prevention.
- Accredited Installers – Must meet PAS 2035 standards to guarantee safe, high-quality, and long-lasting installations under ECO4.
The ECO4 scheme is a key part of the UK’s strategy to tackle fuel poverty, improve living conditions for vulnerable households, and progress towards the 2050 net-zero target.

Eligibility Criteria for ECO4

The ECO4 scheme is designed to support low-income households, vulnerable individuals, and properties with poor energy efficiency ratings. The eligibility criteria ensure that government funding reaches those most in need of help with free insulation, boiler replacements, and renewable heating upgrades.

A. Household Eligibility

1. Benefit-Based Qualification

Households automatically qualify for ECO4 funding if someone receives certain means-tested benefits, including:

Universal Credit (UC)
Income-based Jobseeker’s Allowance (JSA)
Income-related Employment and Support Allowance (ESA)
Income Support (IS)
Pension Credit (Guarantee Credit & Savings Credit)
Working Tax Credit (WTC)
Child Tax Credit (CTC)
Housing Benefit

2. Income-Based Eligibility

Households with an annual gross income of £31,000 or less may qualify, depending on property criteria.

3. Health-Related Eligibility

ECO4 also helps those with health conditions made worse by cold homes, such as:

Respiratory illnesses (COPD, asthma)
Cardiovascular conditions
Limited mobility
Weakened immune systems

B. Property Eligibility

EPC Rating: Homes with EPC bands D, E, F, or G are eligible, provided improvements can raise efficiency by at least two bands.
Tenure Types:
- Owner-occupied properties
- Social housing (EPC E–G)
- Private rented homes (landlord contribution required)
Specific Property Types: Park homes, high-rise buildings, and off-gas grid properties are included.

C. ECO4 Eligibility Pathways

Benefit-Based Route (Core Group)
Households on eligible benefits automatically qualify with proof of benefit receipt.
ECO Flex (Flexible Eligibility)
Local councils can refer households who:
- Are on a low income and vulnerable to cold homes
- Are in fuel poverty but not receiving qualifying benefits
- Fall just outside standard benefit-based criteria
In-Fill Mechanism
Some non-eligible households can still benefit if part of larger projects:
- Up to 50% in-fill for solid wall insulation projects
- Up to 30% in-fill for district heating system projects

Additional Considerations

- Property Ownership: Homeowners must have the legal right to approve improvements.
- Landlord Consent: Rented homes need landlord permission.
- Previous ECO Measures: Homes with past ECO improvements may still qualify if more upgrades are possible.

Available Measures under ECO4

The ECO4 scheme provides funding for a wide range of energy efficiency improvements designed to boost a home’s Energy Performance Certificate (EPC) rating. Under the scheme, the aim is to increase each property’s EPC by at least two bands, helping households reduce energy bills and cut carbon emissions.

ECO4 takes a whole-house retrofit approach, ensuring maximum efficiency gains by combining multiple energy-saving measures such as insulation, heating system upgrades, and renewable technologies.

ECO4 Insulation Measures

The ECO4 scheme offers funding for a range of home insulation upgrades that can cut heat loss by up to 30%, helping households lower bills and improve comfort. These ECO4 insulation grants focus on the most effective solutions:

Loft Insulation – Prevents heat escaping through the roof, improving warmth and efficiency.
Cavity Wall Insulation – Fills gaps between external walls to retain heat and reduce energy waste.
Internal Wall Insulation – Increases thermal efficiency for solid wall properties.
Room-in-Roof Insulation – Enhances comfort and energy performance in converted loft spaces.

By improving insulation, ECO4 helps homes achieve higher Energy Performance Certificate (EPC) ratings, reduce heating costs, and support the UK’s move towards net-zero.

ECO4 Grants – Are You Eligible?

Benefits of the ECO4 Scheme for UK Homeowners and Renters

The Energy Company Obligation (ECO4) scheme offers a wide range of benefits for homeowners and private tenants across the UK. This government-backed energy efficiency grant aims to create warmer, more affordable, and environmentally friendly homes by funding essential energy-saving improvements.

1. Lower Energy Bills

One of the biggest advantages of the ECO4 government grant is the potential to significantly reduce household energy bills. Through funded home upgrades such as boiler replacements, improved insulation, heating system upgrades, and smart heating controls, many households can save up to 30% on annual energy costs. These improvements make your home more energy-efficient and less dependent on expensive fuel sources.

2. Improved Home Comfort

Energy-efficient upgrades under the ECO4 scheme help maintain consistent indoor temperatures and reduce heat loss. With better insulation and modern heating solutions, homeowners and tenants enjoy a warmer, cosier living environment—especially during the cold winter months.

3. Free or Subsidised Home Energy Upgrades

The ECO4 funding provides free or heavily subsidised energy-saving improvements for eligible households. Depending on your eligibility, this can include new boilers, central heating installations, insulation upgrades, or even renewable solutions like air source heat pumps. These measures make energy efficiency more accessible to low-income and vulnerable households across the UK.

4. Increased Property Value

Energy-efficient homes are not only cheaper to run but also more attractive to buyers. By boosting your Energy Performance Certificate (EPC) rating, ECO4 improvements can increase your property’s market value—making it a smart long-term investment.

5. Supporting a Greener Future

By reducing your home’s energy consumption and carbon emissions, the ECO4 energy efficiency scheme plays a vital role in helping the UK achieve its net-zero carbon emissions target by 2050. Switching to renewable energy systems and low-carbon heating solutions means a smaller carbon footprint and a healthier planet for future generations.

6. Long-Term Energy Savings

While the ECO4 home upgrades are often fully funded, the financial benefits last for years. Depending on the measures installed, homeowners can experience lasting energy savings for 10–15 years or more, leading to continued comfort and cost reductions.

7. Comprehensive Energy Efficiency Package

The ECO4 scheme offers a complete package of home energy improvements—not limited to boiler replacements. From loft and wall insulation to renewable heating technologies, each measure works together to enhance your home’s EPC rating and overall efficiency.

8. Enhanced Financial Security

Reducing your energy bills through ECO4 helps households free up income for other essentials, improving financial stability and reducing the impact of rising energy prices.

9. Promoting Sustainable Living

The ECO4 home improvement scheme supports a transition to sustainable living by encouraging the use of renewable energy sources and energy-efficient technologies. It not only benefits individual households but also contributes to the UK’s wider environmental goals, helping build a greener, more sustainable future.