The Energy Company Obligation 4 (ECO 4) has become law, the Installation Assurance Authority (IAA) said in August 2022, but the scheme is being delivered at a fraction of the rate the industry previously managed. The IAA, which describes itself as an independent assurance body, said delays in laying the legislation mean delivery is running at only 25 percent of traditional capacity, and that installers are seriously having to consider laying off staff1.
The same statement set out the price context. The UK energy price cap was confirmed to hit £3,549 in October 2022, which the IAA said would increase the average homeowner energy bill by £1,578 a year1. It also said the industry is delivering fewer insulation measures than at any time since 20121.
"ECO 4 is now a reality however given the delays in laying the legislation we are currently delivering at only 25 percent of traditional capacity"
The IAA listed six measures it said were needed, including minimum energy efficiency standards for owner occupiers aligned with clear incentives, a grant scheme for those not able to pay, green lending from mortgage lenders at attractive interest rates, greater promotion of energy efficiency and centralised savings advice linked to local authority campaigns, training incentives to grow a competent workforce, and practical standards that protect consumers without inhibiting retrofit at scale1. It also referred to suggestions that short term affordability support will need a £100 billion investment over the next two years, without attributing the figure to a named body1.
Why it matters for households
ECO 4 is the mechanism through which energy suppliers fund efficiency measures in homes, so the pace of delivery determines how quickly households can access insulation and glazing and other improvements. The IAA's figure of 25 percent of traditional capacity indicates that, at the time of writing, the pipeline of work was far below what the industry had previously sustained, which affects how quickly a household can get a measure installed once it qualifies1. The IAA's own framing links this to energy independence at the level of the individual home: fewer measures installed means less reduction in energy usage, and it argues that without longer term measures, public money continues to be spent on short term cost of living interventions without longer term benefit1. The detail of who qualifies and what is funded sits with the ECO4 scheme itself, while the delivery side involves installers and retailers and bodies such as YES Energy Solutions that administer schemes.
What happens next
The IAA said the new Conservative Party leader would have to address the near term affordability of energy bills, and that longer term policy would not have an immediate impact at scale1. No timetable for recovery in delivery rates is given in the statement, and no further dated steps have been reported1.