The Energy Company Obligation (ECO) scheme, operational since 2013, is a pivotal initiative aimed at enhancing energy efficiency in UK homes. Its primary objectives are to alleviate fuel poverty, contribute to carbon reduction targets, and promote energy-efficient practices. With an extended timeframe until March 2026 and an annual budget of approximately £1 billion, ECO4, the latest iteration of the scheme, focuses on low-income and vulnerable households, assisting them in improving their home's energy efficiency.
Obligation Targets and Scoring
Under ECO4, energy suppliers are subject to a statutory target based on annual bill savings. The scheme is particularly targeted at homes in the least energy-efficient categories, specifically aiming to improve houses in SAP bands D and E to at least band C and bands F and G to at least D.
Emphasis on Innovation
ECO4 has introduced innovative mechanisms to support the development of domestic energy efficiency measures. However, ECO4 has discontinued the Demonstration Action mechanism, deeming it less effective for testing individual measures in fuel-poor households.
Uplift Levels for Innovation Measures (IMs)
ECO4 introduces two tiers of IM uplift: 25% for reasonable improvements over existing products and 45% for substantial improvements, encouraging a diverse range of innovative products.
Standard Alternative Methodology (SAM) and Data Light Measures (DLMs)
These are optional measures under ECO4, enabling the scoring of innovative measures not yet recognised in the Standard Assessment Procedure (SAP).
Delivery Caps
ECO4 imposes delivery caps for IMs and DLMs, with a 10% cap on overall IM delivery and a 5% sub-cap for individual innovation measures. SAM measures, however, are not subject to a delivery cap.
Ofgem's Role
As the ECO4 scheme administrator, Ofgem and a Technical Advisory Panel evaluate applications for IMs. They ensure that each measure meets product installation and consumer protection standards equivalent to ECO4's broader requirements.
Compliance and Eligibility Criteria
All measures must adhere to the relevant Publicly Available Specifications (PAS), Microgeneration Certification Scheme (MCS), or equivalent standards to be eligible under the ECO4 scheme.
Installation Standards and Guarantees
TrustMark Registered Businesses must deliver all ECO measures, with a few exceptions. These measures require at least a two-year insurance-backed guarantee, extending to 25 years for certain insulation measures.
SAP and New Measures
ECO4 encourages the inclusion of newer energy-efficient measures not yet recognised in SAP. These measures can obtain scores through SAM or DLM routes, contributing towards supplier obligations and overall scheme goals.
Cybersecurity and Smart Technologies
For smart technologies and flexible heating systems, cybersecurity considerations are paramount. These systems must be safe, secure, and capable of responding to digital signals in real-time.
Ongoing Developments
ECO4 is actively collaborating with industry experts to incorporate new and innovative products within the scheme's framework, aligning with ongoing revisions of PAS standards.
To learn more about the ECO scheme and how you might benefit, even if you think you might not qualify, please visit our Eligibility form or contact a team member at .
You may be eligible for an ECO 4 Energy Efficiency Grant. The grants can help you cover the cost of various energy efficiency improvements.
Regulated Ofgem and all work carried out through Trustmark installers to guarantee the highest quality.
To determine eligibility, simply complete our eligibility form.
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