In the year of 2022, this is much more of a crisis than ever, as energy prices have recently had massive spikes affecting the entirety of the UK. The grants go towards several installations, which we will detail further, that retain much more energy for less. As of October, for example, you could save nearly 700 pounds per year from these grants just by installing insulation.

First, what exactly is the Energy Company Obligation?

ECO4 is a government scheme that consists of grant funding available to households suffering from low energy efficiency – meaning that plenty of their energy goes to waste, costing them more money than necessary.

The Energy Company Obligation (ECO) scheme places a responsibility on energy suppliers to provide funding for improving energy efficiency in qualifying homes. The overall aim is to help tackle fuel poverty and reduce carbon emissions from households. 

The ECO Scheme has been operating since 2013 with the previous phase known as ECO3. ECO4 is set to come into effect in late 2022 and there are some key changes to the scheme that will be introduced when ECO4 kicks off. Find out everything that needs knowing about ECO4 here.

ECO is a scheme that aims to help households who are struggling with their fuel bills. It is a government-backed scheme that obligates energy companies to help homes lower the emission of carbon and meet its reduction targets. Through this obligation, energy suppliers provide funding for qualifying homes which enables them to install energy efficiency measures throughout England, Scotland, and Wales. The Energy Company Obligation began in 2013 and, according to official government figures, more than 3 million measures have so far been added to more than 2.2 million homes.

What is ECO4 and how is it different from ECO3?

Of the several renditions of the ECO scheme, the newest and last phase is ECO4. It is scheduled to start in 2022 and continue until 2026. UK’s leadership has been consulting on the scheme’s final phase and it’s expected that the eligibility criteria is to undergo modification.

Proposed changes for ECO4 include:

• Removing several qualifying benefits
• An increase of installed measures underneath the Local Authority Flexible Energy (From 25% to 50%)
• A higher Energy Performance Certificate (EPC) standard
• The barring of boilers from the scheme

Qualifying benefit changes

Among the planned changes is the reduction of the number of benefits that can qualify for ECO4, with disability benefits being mainly targeted. It’s also said that they plan to add Housing Benefits and Pension Credit Savings during the next phase. This is because there is going to be a larger emphasis placed on the level of income in the eligibility criteria to ensure low-income households who really will benefit from the scheme can access it. If a household has a combined income of less than £31,000, it may qualify for the ECO4 scheme.

You will see the full list of proposed eligible benefits for ECO4 below.

• Income-based Jobseekers Allowance (JSA)
• Income-related Employment Support Allowance (ESA)
• Income Support (IS)
• Pension Credit Guarantee Credit
• Working Tax Credit (WTC)
• Child Tax Credits (CTC)
• Universal Credit (UC)
• Housing Benefit (now eligible through ECO4)
• Pension Credit Savings Credit (now eligible through ECO4)

Previously qualifying benefits that will be removed under ECO4:

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

Child benefit income thresholds for ECO4

The figures in the above table were taken from the ECO3 thresholds and inflated to reflect 2022 figures, rounded to the nearest £100.

Local Authority Flexible Energy measure changes

Under ECO3, energy companies were permitted to up to 25% of their obligation through LA Flex rules (Local Authority Flexible Energy). This permits councils to put in place their qualifying standards, and they go about this by writing a statement of intent for LA Flex. The rules help households that are not claiming any benefits get access to funding.

As part of the new changes for ECO4, the obligation of energy suppliers has doubled to 50%.

New EPC (Energy Performance Certificate) requirements

With the upcoming changes, grants aim at reaching a higher tier (band) of energy efficiency with the distribution of grants. Properties that reached a band of G, for example, will be upgraded to a rank of D. Similarly, bands of D and E will prompt an improvement to at least C.

This idea promotes higher levels of energy efficiency across the country, resulting in less wasted energy and higher savings. The UK’s leadership is also stating that a minimum amount of band E, F, and G properties will be upgraded, to ensure that the most inefficient homes are not forgotten or left out of the scheme.

Boiler grants (almost) removal from the scheme

Over 130k boilers were fitted under ECO3. With ECO4, these installations have been capped at about 5k, with extra requirements being put in place to specialize access to certain qualifying people.

PAS 2035 will stay a requirement

ECO4, like previous renditions, will continue to mandate compliance with PAS 2035. This means that installers of the new measures will require PAS 2030:2019 Certification in order to provide installs within ECO. Eco-funded projects require oversight via a TrustMark-approved coordinator of retrofitting. By way of support of the PAS 2035 approach, all energy efficiency measures fitted inside a property will be packaged together for each home and scored as a package. This is different from ECO3 where measures were marked individually.

Who is affected by ECO 4’s changes?

If you are claiming one of the qualifying benefits that are being removed from the criteria you need to know the changes so you can check to see if you could meet the new terms in any other way and access a grant. If you receive Housing Benefits alongside any of the non-qualifying benefits you will still be eligible for a grant through ECO4, but we still recommend that you check your eligibility for the scheme via our website sooner rather than later.

Also, homeowners with outdated, inefficient and unreliable boilers should apply for a grant for an air source heat pump as soon as they can as very few boilers are expected to qualify under the new terms of ECO4, and even if your boiler does qualify, as soon as the cap has been reached there won’t be any more boiler grants available.