Understanding the ECO Scheme
The Energy Company Obligation (ECO) is a government energy efficiency scheme for Great Britain. It has been in operation since January 2013 and mandates that large energy companies support households in installing energy-efficient measures. The primary aim of the scheme is to help alleviate fuel poverty, reduce carbon emissions, and improve the energy efficiency of homes. Since its inception, the scheme has delivered over 3.5 million improvements in around 2.4 million homes​​.
Objectives of the ECO4 Scheme
The current phase of the scheme is known as ECO4. ECO4 targets low-income and vulnerable households, specifically those living in homes that are significantly less energy efficient. The principal objectives of ECO4 are to:
- Reduce Fuel Poverty: By improving home heating efficiency, the scheme helps lower energy bills, making heating more affordable for low-income households.
- Contribute to Carbon Reduction: ECO4 supports the UK’s broader goal of reducing carbon emissions by encouraging the use of more efficient heating and insulation technologies.
- Promote Renewable Energy Use: The scheme helps reduce the costs of meeting the UK’s renewable energy targets through improved energy efficiency.
- Foster Innovation: By supporting innovative products and installation techniques, ECO4 aims to enhance energy efficiency outcomes and deliver broader societal benefits​​.
How ECO Works
Under ECO, obligated energy suppliers such as ourselves are assigned a statutory target to deliver their share of the scheme’s measures. The focus of these measures remains on reducing home-heating costs, particularly for those who are least able to afford energy efficiency improvements. The scheme prioritises properties with low energy efficiency ratings, aiming to improve the Standard Assessment Procedure (SAP) rating of these homes significantly​​.
Innovation in ECO
Innovation has been a key component of the ECO scheme since its third iteration (ECO3). The current ECO4 phase continues to support innovative measures through two uplift levels: 25% for measures with a reasonable improvement explanation and 45% for those showing substantial improvement. This mechanism encourages suppliers to adopt innovative energy efficiency measures that offer better performance, installation efficiency, and reduced environmental impact​​.
Eligibility and Measures
To qualify for support under the ECO4 scheme, households must be in receipt of specific benefits, such as income-based Jobseekers Allowance, Universal Credit, or Pension Credit, among others. The scheme provides greater support to the least energy-efficient homes, aligning with the new Sustainable Warmth Strategy for England and the Low Income and Low Energy Efficiency (LILEE) metric​​.
Measures supported under ECO4 include insulation improvements, heating upgrades, and the installation of renewable energy systems. Importantly, these measures cannot be fueled by coal, biofuels, oil, or LPG, to encourage the adoption of more sustainable energy solutions​​.
The Role of Ofgem
The Office of Gas and Electricity Markets (Ofgem) administers the ECO scheme. Ofgem ensures that all measures installed under the scheme meet the necessary standards and provide assurance to householders about their safety and effectiveness. This involves compliance with TrustMark requirements, Publicly Available Specifications (PAS), and the Microgeneration Certification Scheme (MCS)​​.
At MEB Total Renewable Energy, we are committed to helping our customers navigate the complexities of the ECO scheme. By leveraging the benefits of this program, we aim to assist households in becoming more energy-efficient, reducing their carbon footprints, and achieving significant savings on their energy bills. If you’re interested in learning more about how the ECO scheme can benefit you, please contact us today. Together, we can build a greener, more sustainable future.