The Government requires major energy suppliers to fund the Energy Company Obligation (ECO) scheme. This means that all the large energy suppliers are required to enhance energy efficiency across the United Kingdom in order to reduce the country’s carbon emissions.

ECO4 is the latest version of the ECO scheme, targeting lower-income households, it is part of the Government’s strategy to enhance energy efficiency in households that are vulnerable to fuel poverty, where reduced heating costs make the biggest difference to the quality of life.

The ECO 4 scheme (the government’s Energy Company Obligation) is the fourth, and likely final, entry to the scheme to help qualifying households receive funding for the installation of home improvements that promote energy efficiency such as insulation.

The Energy Company Obligation scheme is designed to increase energy efficiency measures in the least energy efficient homes – typically to support low income households. Its aim is to target vulnerable households living in fuel poverty to improve their home’s energy efficiency rating. ECO4 began in April 2022, and is due to continue until March 2026.

What are the main goals of ECO4?

One of the main aims of the ECO4 scheme is to help the government lower carbon emissions in domestic homes across the UK in order to achieve its legally binding goal of reaching net-zero emissions by 2050. To do this, it places the responsibility of providing the grants to eligible households on the energy companies and energy suppliers that serve our homes. Recent government figures have shown that over 3.1 million energy-efficient measures have been installed in more than 2.3 million homes through the ECO4 scheme.

Both homeowners and privately renting tenants can get involved in the ECO4 scheme if they meet the criteria. If you are a landlord for example, and your tenant is receiving one or more eligible benefits, you may want to encourage them to apply for funding. This will mean your building’s energy efficiency will be improved with new insulation and it will likely see an increase in value too as a result. Your tenant will also benefit thanks to the improved energy efficiency of the home they’re staying in, reducing their energy bills and making their home more comfortable as a result.

Making use of the Energy Company Obligation (ECO4 scheme) just makes sense.

What energy efficiency measures can ECO4 cover?

• insulation – loft, cavity wall, etc
• new heating systems – such as an air source heat pump instead of electric storage heaters
• repairing and replacing inefficient boilers

ECO 4 scheme qualifying benefits

• Child Tax Credits (CTC)
• Child Benefits – depends on income threshold* (see thresholds)
• Income based Jobseekers Allowance (JSA)
• Income related Employment & Support Allowance (ESA)
• Income Support (IS)
• Pension Credit Guarantee Credit
• Universal Credit (UC)
• Warm Home Discount Scheme Rebate
• Working Tax Credit (WTC)

Newly added with ECO4’s roll out are

• Housing Benefit
• Pension Credit Saving Credit

What benefits no longer meet the eligibility criteria?

Benefits which are no longer included in the energy company obligation ECO 4 criteria after being eligible under ECO3 include:

• Armed Forces Independence Payment (AFIP)
• Attendance Allowance
• Carer’s Allowance
• Constant Attendance Allowance
• Disability Living Allowance (DLA)*
• Industrial Injuries Disablement Benefit (IIDB)*
• Personal Independence Payment (PIP)
• Severe Disablement Allowance*
• War Pensions Mobility Supplement (WPMS)

*Claiming Disabled Facilities Grant or disability-related benefits may not qualify for ECO4 directly but if you were claiming these in the past you’re likely to receive Universal Credit now which may allow you to apply for the new scheme.