The ECO4 Scheme Explained
The Energy Company Obligation 4 (ECO4) is the UK Government's flagship energy efficiency scheme, providing free home improvements ā including free boiler replacements ā to eligible households across England, Scotland and Wales.
ECO4 Key Facts
What is the ECO4 Scheme?
The Energy Company Obligation (ECO) is a UK Government energy efficiency scheme that legally requires large energy suppliers ā including British Gas, EDF, E.ON, Octopus Energy, OVO Energy, Scottish Power, and others ā to fund free home improvements for eligible low-income and vulnerable households. The scheme has been running in various forms since 2013.
ECO4 is the fourth phase of the scheme, running from April 2022 to December 2026. It has a total budget of approximately Ā£4 billion and aims to improve the energy efficiency of the UK's least efficient homes ā those with EPC ratings of D, E, F, or G ā by funding measures such as free boiler replacements, insulation, heat pumps, and heating controls.
Who Funds the ECO4 Scheme?
The ECO4 scheme is funded by large UK energy suppliers, who are legally obligated by Ofgem to spend a set amount on energy efficiency improvements for eligible households. The cost is ultimately borne by energy suppliers as part of their regulatory obligations ā not by the government directly, and not by the households who receive the improvements.
The energy suppliers who are obligated under ECO4 include British Gas, EDF Energy, E.ON Next, Octopus Energy, OVO Energy, Scottish Power, and several others. Each supplier has a specific obligation target, and they meet this target by funding improvements through approved installers.
What Does ECO4 Cover?
How is ECO4 Different from ECO3?
ECO4 introduced several important changes from its predecessor, ECO3. The key differences are: ECO4 focuses exclusively on the least efficient homes (EPC DāG, compared to ECO3's EāG), ECO4 requires a whole-house approach where multiple measures are installed together rather than single measures, and ECO4 has a higher maximum grant value of up to Ā£15,000 per household.
What Happens After ECO4 Ends?
The Government has announced the Warm Homes Plan as the successor to ECO4. The Warm Homes Plan is expected to launch in 2027 and will provide continued support for energy efficiency improvements, with a focus on low-carbon heating solutions such as heat pumps. The Warm Homes: Local Grant pathway has an income threshold of Ā£36,000 per year.