What is the ECO4 Scheme?

The Energy Company Obligation (ECO4 scheme) is a UK government-backed initiative, aimed at improving the energy efficiency of homes across the UK

Introduced in 2013, the ECO initiative requires energy suppliers to install cost-effective energy saving solutions in some of the UK’s most vulnerable properties, without breaking the bank of eligible homeowners.

These measures can include insulation, heat pumps, boiler replacements or solar panels. Sometimes a small fee is needed for installation costs, but these upgrades are sometimes free.

Since launching in 2013, over 3.6 million energy-efficient measures have been installed in more than 2.4 million homes across the UK, with wall insulation being the most common benefit.

Government figures estimate nearly £20bn has been saved from lifetime bill savings, all thanks to the government scheme.

As of 2023, there have been five ECO schemes, however, only ECO4 Scheme is currently in operation.

What is the ECO4 Scheme?

ECO4 is a government-supported initiative that has been put in place to help reduce household carbon emissions and provide more energy efficiency measures to UK homes.

Through the ECO4 Scheme, homes could receive discounted (or free) home insulation, an upgraded boiler or green heating system.

However, only the most energy-inefficient homes can benefit from ECO4, meaning that your property must have an Energy Performance Certificate (EPC) of D or lower.

ECO4 was introduced by the government in April 2022 and will run until 31 March 2026.

The scheme is part of the government’s commitment to making all housing stock more energy efficient by 2035.

It’s a continuation of ECO3, but with some important changes that are designed to make the scheme more customer-friendly, such as a greater focus on low-income households and areas of high fuel poverty.

What’s Covered in the ECO4 Scheme?

The ECO4 scheme covers a range of energy saving solutions that can be applied to existing homes, such as:

Insulation

Installing insulation is the most common benefit from the ECO4 Scheme, helping homes save up to £1 ,800 a year.

Cavity wall, solid wall, room in a roof and loft insulation are some of the insulation measures available through ECO4, but this depends on individual household circumstances.

The ECO4 Scheme takes a fabric-first approach, meaning that it aims to make properties more energy efficient before considering any other measures, like heating upgrades.

Green heating systems

The installation of green heating systems, such as air-source heat pumps and biomass boilers is also covered by the ECO4 scheme. These state-of-the-art heating systems can be used to replace outdated, inefficient boilers and can provide households with up to a 25% reduction in their energy bills.

Households can still benefit from solar panel installation through the ECO4 Scheme; however, this is only if a heat pump or biomass boiler has been ruled out.

Repairing boilers

Not every boiler will be replaced with a heat pump, and so the ECO4 scheme provides funding for repairing and upgrading existing boilers to make them more efficient.

Through the ECO4 Scheme, households can make the most of their boilers and use them up to their fullest potential (typically 12 years).

‘Boiler repair’ is also covered by the ECO4 Scheme, which can include diagnostics, cleaning and repairs to help restore boilers.

What makes ECO4 different from ECO3?

Although there are many similarities between the ECO3 and ECO4, the latter stage aims to reach more vulnerable households and areas with high fuel poverty.

ECO4 targets vulnerable households receiving benefits or those in the low-income bracket, ensuring that all homes have access to affordable energy.

However, one major difference between the ECO4 and ECO3 Schemes is that some benefits that were previously eligible through ECO3 cannot apply through the ECO4 Scheme.

The ECO4 report states that this is “to help better target households which are more likely to be on low incomes”.

Additionally, there were almost 134,000 boilers were upgraded under the ECO3 Scheme, but this is being limited to just 5,000 under the ECO4 Scheme.

Only a select few households will be able to benefit from a biomass boiler through the ECO4 Scheme, meaning more homes will benefit from improved insulation or an air-source heat pump.

Who is eligible for the ECO4 Scheme?

You might be asking ‘who qualifies for the ECO scheme?’

To be eligible for the ECO4 scheme, you must be receiving one of the following qualifying benefits:

• Income based Jobseekers allowance
• Income related Employment & Support Allowance
• Income Support
• Universal Credit
• Child Tax Credit
• Working Tax Credit
• Pension Credit Guarantee Credit
• Pension Credit Savings Credit
• Housing Benefit

• Disability Living Allowance
• Carer’s Allowance
• Personal Independent Payment
• Armed Forces Independent Payment
• War Pensions Mobility Supplement
• Attendance Allowance
• Constant Attendance Allowance
• Industrial Injuries Disablement Benefit
• Severe Disablement Allowance

Energy Performance Certificate (EPC) requirements

The Energy Performance Certificate rating of the property must show that the building requires improvement.

This means that properties with an EPC rating of D or higher will not be eligible for ECO4.

Homes with an EPC rating of F or lower will receive the appropriate measures to improve the property to at least a D rating.

Meanwhile, homes with an existing EPC rating of D or E will be upgrades to at least a C rating.

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, so the sooner these changes are made – the better.

Learn more: How to Improve EPC Rating in 9 Easy Steps (2024)

Changes in Child Benefit Income Threshold

There have also been changes in the Child Benefit threshold under the ECO4 Scheme:

Changes to the number of measures installed under Local Authority Flexible Energy

While the ECO3 Scheme was running, energy companies were allowed to use up to 25% of their obligation through Local Authority Flexible Energy rules.

These rules allow councils to set their own eligibility criteria, helping homes that don’t claim benefits access funding.

However, through the ECO4 Scheme this has been doubled to 50%.

How to apply for the ECO4 Scheme

If you live in the UK and fit the criteria, you can apply for the ECO4 scheme today by contacting energy suppliers and asking what measures they offer. It is important to note that you cannot directly apply for ECO funds, as this must be done through an energy supplier.

Alternatively, contact a member of the So Eco team today and we can help you upgrade your property for free today.

What is the Great British Insulation Scheme Scheme?

We understand that not everyone living in energy-inefficient homes is receiving some kind of government benefit – and so does the government!

In fact,  46.1% of fuel-poor households are not in receipt of government benefits.

To make it worse, only 42% of homes in England have an EPC rating of C or higher!

Luckily, through The Great British Insulation Scheme, thousands more  UK homes can access affordable energy.

Formally known as ECO Plus, this scheme is a brand-new government initiative, aimed at helping those not on government benefits upgrade their home’s energy efficiency.

The scheme comes into action from summer 2023 until 2026, and offers the same home upgrades as ECO4.

To learn more, read our Complete Guide to the Great British Insulation (ECO+) Scheme or learn about the differences between ECO4 and the Great British Insulation Scheme that consumers must be aware of.

Upgrade your home for free with MES ENERGY

Thank you for reading our ultimate guide on the ECO 4 Scheme. We hope you enjoyed it!

Our team are always available to answer any questions you may have about home energy upgrades – so don’t hesitate to contact us!