ECO4: The Current Energy Company Obligation Scheme

ECO4 is the fourth phase of the Energy Company Obligation, an energy efficiency scheme for Great Britain first introduced in 2013. It works by placing a Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers, who must deliver insulation and heating measures to low income and vulnerable households¹. Ofgem administers the scheme; the legal basis is the Electricity and Gas (Energy Company Obligation) Order 2022, as amended, and the guidance applies to measures installed from 1 April 2022². The scheme was valued at £4 billion when its design was consulted on³.

The obligation period runs from the commencement of the ECO4 Order on 27 July 2022, and the delivery guidance published in March 2026 states that the scheme has been extended by nine months to 31 December 2026, with Phase 4 running from 1 April 2025 to 31 December 2026⁴. Other official pages still give the original end date of 31 March 2026, so the two dates stand side by side unresolved. Separately, some councils now describe ECO4 as closed to new applications, and one council notice states that no new applications can be funded⁵.

The distinguishing feature of ECO4 is that it funds whole house retrofits rather than single measures, on a fabric-first, multi-measure basis, with a minimum improvement the property must reach⁴. A household cannot draw down a fixed sum: ECO4 is a supplier obligation and not a grant scheme, so the money and the decision sit with an obligated supplier and its contractors⁶.

What ECO4 is and who pays for it

ECO is not funded from taxation. The scheme requires large energy suppliers to deliver energy efficiency improvements to domestic households, and the cost of meeting that obligation sits with the supplier and, through tariffs, with energy customers generally¹⁰. The ECO4 scheme consists of one distinct obligation, the HHCRO, and the target for delivery is divided between obligated suppliers according to each obligated supplier's relative share of the domestic gas and electricity market².

Ofgem is the ECO4 scheme administrator¹¹, and councils describe ECO4 and its sister schemes as UK Government-backed schemes regulated by Ofgem¹². Ofgem's role is to publish the delivery and supplier administration guidance, receive measure notifications, and audit what has been installed. The version history matters when reading the rules: the current delivery guidance is version 4.0, dated 26 March 2026, superseding version 3.2 of 8 December 2025⁴.

For a household, the practical consequence is that there is no application desk at Ofgem. The chain runs from an obligated supplier, through a managing agent or contractor, to a TrustMark registered installer, and often through a local authority that has declared the household eligible. The wider picture of how supplier-funded work fits with tax-funded grants is set out on the home energy grants pillar page and in more detail under the Energy Company Obligation.

Purpose: cutting heating costs for low income and vulnerable households

The stated main objective of ECO4 is to reduce fuel poverty by improving the least energy efficient housing stock occupied by low income, vulnerable and fuel poor households⁸. Obligated suppliers are legally required to reduce heating costs for that group by funding energy efficiency, insulation and heating measures⁶. Councils describe the aim in plainer terms: to help those living in fuel poverty and vulnerable to the risk of living in a cold home, whose house is energy inefficient⁵.

Two objectives sit alongside each other. Ofgem's guidance describes ECO4 as focusing on supporting low-income, vulnerable, and fuel poor households through delivering energy efficiency measures¹⁴, while scheme documents also frame it as designed to tackle fuel poverty while also reducing carbon emissions through supporting whole house energy efficiency improvements¹⁵. The British Energy Security Strategy committed to begin ECO4, which it said would upgrade 450,000 homes over four years⁹.

For a household's energy independence the effect is real but partial. Insulation permanently reduces the amount of energy the home needs, which is the one gain no supplier can withdraw. Heating measures, by contrast, may move the home from one fuel dependence to another: from oil or solid fuel to a heat pump running on grid electricity, or from storage heaters to mains gas. The funding itself remains a dependence on an obligated supplier's remaining budget, which is why availability varies so sharply by area and by month.

How the supplier obligation works: HHCRO and the minimum requirement

ECO4 sets a main obligation called the Home Heating Cost Reduction Obligation⁴. A supplier is caught by it if it supplies to at least 150,000 customers in the relevant qualification year, and each supplier that exceeds the thresholds has an obligation calculated based on each unit of supply above the supplier allowance². Suppliers notify their domestic customer numbers and supply volumes by a fixed date for each phase: 17 August 2022 for Phase 1, then 1 February 2023, 1 February 2024 and 1 February 2025 for Phases 2, 3 and 4².

Several internal caps shape what suppliers actually deliver:

Because delivery is scored rather than paid per item, projects must reach a minimum improvement rather than simply install something. Properties with starting bands F and G must be improved to a band D, while properties starting at band E or D must be improved to a band C⁶. Where building fabric repair is claimed under the amending Order, it must be recommended in a report by a chartered surveyor following an assessment of the condition of the insulation and related building fabric¹⁶. How the scoring works in practice, including the modelling of a premises with a total floor area of 80m2 used in the scoring consultation¹⁷, is covered under ECO4 scoring and minimum requirements.

Eligibility: benefits, EPC bands and property rules

Two tests apply at once. The household must be in receipt of a means tested benefit or qualify through one of the ECO Flex routes, and the property must need heating or insulation measures that will deliver a significant energy efficiency improvement¹⁸.

The benefits listed for the Help to Heat Group are income-based Jobseeker's Allowance, income-related Employment and Support Allowance, Income Support, Pension Credit Guarantee Credit, Pension Credit Savings Credit, Universal Credit, Housing Benefit, Child Tax Credit and Working Tax Credit, and Child Benefit subject to income caps and household composition⁴. Housing Benefit is confirmed as a qualifying benefit on the affordable warmth route¹⁹. The detail is set out on ECO4 eligibility and which benefits qualify.

On the property side, only homes in EPC band D to G can be treated⁷. Private rented homes are treated more strictly: under ECO4, private rented sector households must be in EPC bands E, F or G for all eligible routes²⁰, and a house rented from a private landlord must have a rating of E, F or G to be eligible, with the owner's permission required¹⁰. Owner-occupied homes referred through Flex Routes 1, 3 and 4 may be in bands D to G¹³. Social housing support was aimed at the least efficient stock in bands E to G²¹.

• Eligible domestic premises include mobile homes, and premises delivered via LA Flex and in-fill⁴.
• Care homes and student halls of residence are not eligible, as these are commercial properties¹³.
• In a private rented home, replacement, upgrade or repair of a boiler, central heating system or electric storage heater is generally not eligible⁴.
• For an in-fill flat, eligible measures are cavity wall insulation, solid wall insulation and district heating connection, and the applied measure must match that of the associated ECO-eligible property⁴.

Eligibility routes: Help to Heat, LA Flex, In-Fill and Supplier Flex

The eligibility and pre-installation declaration names five routes: Help to Heat Group, Social Housing, LA Flex, In-Fill and Supplier Flex²². The same five appeared on the original eligibility requirements form in October 2022²³.

The Flex element allows local authorities and the Scottish and Welsh governments, referred to in the scheme as Devolved Administrations, to declare households eligible who are not on a qualifying benefit²⁴. There are four separate qualifying routes to identify low income and vulnerable households, and suppliers may only provide evidence for Routes 2 and 4²⁵.

Route 4 exists so that suppliers and local authorities can submit an application to the department where they have identified new methods to identify low-income and vulnerable households, demonstrating the methodology is more effective than Routes 1 and 2; the application must be approved by or on behalf of the Secretary of State²⁶. Route 4 applies to ECO4 Flex only²⁷. Qualification under ECO4 Flex Route 2 also opens a route into the Warm Homes: Local Grant²⁸. The mechanics of the local authority declaration are covered on ECO4 Flex, and the choice between routes on ECO4 Flex vs the Help to Heat route.

What gets funded: insulation, heating, solar PV and heat pumps

ECO4 funds insulation and heating qualifying actions². Council scheme pages group the offer as insulation, boilers and central heating, and solar and renewable energy technologies¹⁵.

The measures table in the delivery guidance covers upgrades to a non-renewable heating system, upgrades to a renewable heating system, repair of a broken heating system, replacement of a broken efficient heating system, first time central heating, electric storage heater upgrades, repairs and replacement, connection to a district heating system, heating controls, solar PV, wall, roof, floor and loft insulation, draught proofing, window glazing and higher performance external doors⁴.

Examples given for ECO4 Flex include solid wall insulation, cavity wall insulation, room in roof insulation, loft insulation, flat roof insulation, an electric storage heater upgrade, first time central heating to an air source heat pump, a boiler upgrade from oil, LPG or solid fuel to an air source heat pump, and solar photovoltaic panels⁶. Solar PV panels are funded²⁹. What household support may look like in a gas-heated home includes installing central heating where there is no boiler or radiators, replacing storage heaters or coal fires with gas central heating, replacing a non-condensing combi boiler with a modern combi, or replacing a heat only boiler with a modern combi¹⁸. A combined park home insulation measure was introduced at the design stage¹⁷.

Two limits matter. ECO4 will not provide loft or cavity wall insulation on their own¹⁸. And measures may be rejected where the project does not meet the rules³⁰. See ECO4 solar panels and ECO4 heat pump funding.

Whole house retrofit: the fabric-first approach

ECO4 focuses on whole house retrofits for low income and vulnerable households², shifting to a fabric-first multi-measure whole-house retrofit approach⁷. In practice that means the assessment looks at the building as a system: the insulation is specified first so that the heating system is sized against a reduced heat demand, and the project is judged on the band the home reaches rather than on the measures installed.

This is the clearest difference from the scheme running alongside it. The Great British Insulation Scheme complements ECO4 but, unlike ECO4's whole house approach, mostly delivers single insulation measures³¹. Its governing legislation is referred to as the ECO4A Order, and the two schemes share evidence forms: the Great British Insulation Scheme and ECO4 forms are used to collect and provide evidence of measure eligibility³¹. Crucially, a measure does not count as a qualifying action on ECO4 if it has been notified under the Great British Insulation Scheme⁴, though ECO4 approved innovation measures can be delivered where the insulation scheme's measure type and eligibility requirements are met³². The comparison is drawn out on GBIS vs ECO4.

For independence, the fabric-first sequence is the part with lasting value: it lowers demand permanently, which reduces exposure to whatever the household's fuel costs in future, and it makes a later low-carbon heating system viable at a smaller size.

Phases, deadlines and the nine-month extension

The obligation period runs from 27 July 2022 and is split into four phases²:

Suppliers could choose to deliver early to ECO4 scheme rules and be awarded ECO4 deemed scores from 1 April 2022²¹, and carry-over applications had to be made no later than 30 June 2023².

How a household applies: council, supplier or Flex provider

There is no single national application form. Routes seen across the country include:

1. Approach an obligated supplier or its contractor directly under the Help to Heat route, where a qualifying benefit is held.
2. Apply through a council-managed scheme. Leeds City Council's funding is only available for schemes managed by the council, as well as through contractors who have been endorsed by the council³⁶.
3. Apply through a council's approved Flex providers or agents, who facilitate the application process⁶.
4. Use a regional portal, as with the Greater Manchester ECO4 LA Flex route, which directs applicants through Greater Manchester's Retrofit Portal⁷.
5. Be referred by a local authority partner, such as YES Energy Solutions acting as local authority partner for householders interested in ECO4, ECO Flex or GBIS Flex¹⁵.

Councils can voluntarily participate in ECO4 Flex to identify eligible households not in receipt of a means tested benefit⁸, and ECO4 allows local authorities to identify the most vulnerable households who could benefit from energy efficiency improvements¹⁰. Some councils sit outside the process entirely: one states that it will not be accepting any ECO related requests, and that residents assessed as potentially eligible are referred on to the relevant funding scheme provider or an approved installation company, with information passed to the council for checking via a delivery partner⁵. Eligible households may be a homeowner, private tenant or landlord³⁷. Local authority declarations at the start of Flex were sent to Ofgem by email for review²⁵.

Delivery record, costs and criticism

ECO4's annual delivery costs were expected to be around 70% higher in real terms than those for ECO3³⁸. The mid-scheme changes impact assessment modelled ECO4 compliant delivery at 75%, giving total discounted costs of £671.8m and total discounted benefits of £752.4m³⁹.

Delivery on the ground has been uneven. One council reported 2,583 households supported to make their homes warmer under LA Flexible Eligibility⁴⁰. Another reports that there is very limited funding available through the ECO4 Flex scheme, and many of the approved ECO providers have no access to funding⁴¹. A third states simply that the scheme has now closed to new applications⁴².

Quality has also come under scrutiny. Ofgem commissioned a randomised sample of audits of solid wall insulation installed through ECO4 and the Great British Insulation Scheme, published as statistical audit results in October 2025⁴³.

Where ECO4 does not reach: blending with other schemes

Funding for measures delivered under ECO4 must not be blended with funding from other government schemes or grants, including but not limited to the Warm Home Discount, the Boiler Upgrade Scheme, the Social Housing Decarbonisation Fund and the Home Upgrade Grant²⁴. The delivery guidance repeats the rule flatly: ECO4 funding cannot be blended with other government schemes or grants⁴, and Boiler Upgrade Scheme and ECO funding cannot be blended for the same measure or be included within an ECO4 project¹³.

That matters because the Boiler Upgrade Scheme covers similar technologies, contributing upfront capital grants to support the installation of low carbon technologies⁴⁵, with a scheme budget of £400m for the 2026 to 2027 financial year⁴⁶. The two are alternatives rather than a stack, which is the subject of Boiler Upgrade Scheme vs ECO4 and ECO4 and other grants.

What happens when ECO4 ends

ECO4 was due to end on 31 March 2026, with no subsequent ECO5 replacement⁶. Government guidance to energy suppliers on domestic energy tariff reductions refers to the ending of funding for the ECO4 scheme⁴⁷, and a council news item recorded in December 2025 that the ECO4 scheme would close in March 2026, as announced in the Autumn Budget⁴⁸. The March 2026 delivery guidance then reflected the nine-month extension to 31 December 2026⁴. One council notice on the end of ECO states that no new applications can be funded³⁷.

For households, the consequence is that ECO4 should not be treated as a standing entitlement. Where it closes, the successor routes are the Warm Homes: Local Grant, which also admits homes qualifying under ECO4 Flex Route 2²⁸, the Warm Homes: Social Housing Fund for rented stock, and the Great British Insulation Scheme for single insulation measures. Regulation is also tightening on the rented sector: private landlords are expected to upgrade properties to minimum energy efficiency standards, provisionally band C, by 2030, which will move some of the work ECO4 subsidised into a landlord obligation instead.

The independence point is worth stating plainly. ECO4 has delivered permanent reductions in demand to homes that could not have paid for them, and that part endures after the scheme closes. But the funding was always contingent on an obligated supplier's remaining budget, the administering rules changed repeatedly across four versions of the delivery guidance, and the scheme's closure was set by fiscal announcement rather than by need. A home made warmer by ECO4 is less dependent on fuel; a household relying on ECO4 to get there remains dependent on a scheme it does not control.