Ofgem published its decision on the ECO4 scoring methodology consultation, parts 1 and 2, on 12 April 2022, setting out its final position on how measures installed under the next phase of the Energy Company Obligation will be scored1. The Energy Company Obligation is a government scheme that requires obligated energy companies to deliver energy efficiency measures to domestic premises in Great Britain, administered by Ofgem, with policy and legislation set by the Department for Business, Energy and Industrial Strategy1.
The decision confirms new measure types carrying partial project scores (PPS), including pitched roof insulation, hybrid wall insulation and new district heating system (DHS) connections. Ofgem said: "we intend to introduce PPS for new DHS connections in ECO4"1. On heating measures, it retained its proposed approach and removed the wall type distinction, and it decided to split the standard heating control measure1. For insulation measures, the decision removes the pre-main heat source requirement1.
The scoring framework keeps full project scores (FPS) based on starting and finishing intermediate SAP bands, with scores segregated into four floor area segments1. Partial project scores are pre-calculated and deemed, based on floor area and intermediate SAP band, and include a correction factor of 10 per cent1. Scheme rules will require that the PPS for a measure represents its average annual energy bill savings, based on the difference in average annual bill expenditure between the starting and finishing SAP ratings of the property1.
| Element | Ofgem decision |
|---|---|
| Full project scores | Based on starting and finishing intermediate SAP bands1 |
| Floor area | Scores segregated into four segments1 |
| Partial project scores | Pre-calculated, deemed, based on floor area and intermediate SAP band1 |
| Correction factor | 10 per cent1 |
Ofgem stated that its understanding is that ECO4 legislation will instruct it to calculate scores with reference to SAP 2012, while thresholds will continue to be expressed to one decimal place1. A complete edition of SAP 10 (SAP 10.2) was published in February 2022 and is expected to be adopted for Building Regulations purposes in England from June 20221. BEIS decided not to take forward its proposal to make the English Boiler Plus standard a specific ECO requirement throughout Great Britain1. On one matter, Ofgem decided to postpone its decision until further information on the guidance is available1.
ECO3 ran from 3 December 2018 to 31 March 2022, and ECO4 is intended to run from 2022 to 20261. An interim delivery period allows suppliers to continue delivering measures to ECO3 rules from 1 April 2022 to 30 June 2022, with some exceptions1. BEIS published the Government Response to the consultation on 1 April 20221.
Why it matters for households
The measures confirmed here determine which improvements can be funded and how much progress each one counts for towards a supplier's obligation. Pitched roof insulation and hybrid wall insulation now sit within the scheme's scoring structure, alongside district heating connections, which extends the range of work that can count where a home is connected to a heat network. The removal of the pre-main heat source requirement for insulation measures changes a condition that previously applied to that work1.
Because partial project scores are tied to floor area and SAP band, and represent average annual bill savings, the value credited to a given measure varies with the property rather than being a single national figure1. The 10 per cent correction factor accounts for interaction between measures installed in the same home1. For a household, the practical effect is that the assessed starting and finishing SAP ratings, not the measure alone, drive what a project is worth under the scheme. The scoring detail sits alongside the separate question of which households qualify, which depends on benefits and eligibility rules rather than scoring.
What happens next
The interim delivery period runs from 1 April 2022 to 30 June 2022, during which suppliers may continue to deliver measures to ECO3 rules, with some exceptions1. ECO4 is intended to run from 2022 to 20261. Ofgem has postponed one decision until further information on the guidance is available; the sources do not state which guidance or when that decision will be made1.