The Department for Energy Security and Net Zero has published the final stage impact assessment for mid-scheme changes to the Energy Company Obligation 4 (ECO4) and the Great British Insulation Scheme (GBIS), following a consultation held in November 2024 that received 122 responses1. The department states that the outcome is a set of policy changes published alongside the assessment, and that the intention is to legislate so the changes are allowed from the date of the consultation publication, 14 November 20241.
The agreed changes are: allowing two measures out of floor, loft and cavity wall insulation to be installed simultaneously as part of a GBIS project; allowing smart thermostats to be installed in the low-income group; and allowing delivery achieved under ECO4 rules to count towards an obligated supplier's GBIS target1. The original GBIS policy did not allow multiple measures in one household, only a single measure1.
"The changes being implemented through this government response would help to ensure ECO4 and GBIS support our statutory objectives"
GBIS was estimated to be a £1 billion obligation on energy suppliers, covering EPC D to G properties across a low-income group and a general group between Spring 2023 and March 2026, and originally aimed to deliver 55,998,000 in annual bill savings1. Delivery figures from the Household Energy Efficiency National Statistics to the end of December 2024 were1:
| Metric | Count |
|---|---|
| Total number of homes | 46,887 |
| Low-income group | 17,111 |
| General group | 29,579 |
| Total number of measures | 58,975 |
| Loft insulation | 16,295 |
| Cavity wall insulation | 24,778 |
| Under floor insulation | 144 |
| Solid wall insulation | 3,254 |
| Heating controls | 12,093 |
The assessment says GBIS is proving more difficult and costly to deliver than estimated, with Ofgem reporting installation rates lower than expected and suppliers reporting higher costs and supply chain constraints1. The average GBIS cost is reported by suppliers to be £26.03 per annual bill saving, higher than assumed in the original impact assessment1. The department says the changes should improve delivery and increase confidence that the overall cost of compliance meets the original £1 billion estimate1.
Why it matters for households
Both schemes place a legal obligation on larger energy suppliers to deliver energy efficiency measures to eligible households, so the rules determine what work a household can actually have funded. Allowing two insulation measures in one GBIS project changes what a single installation can cover, and permitting smart thermostats in the low-income group widens the measures available. Counting ECO4 delivery towards GBIS targets affects how suppliers choose to meet their obligations, which in turn affects where contracts are offered. The assessment notes that the proposal theoretically reduces the number of homes able to be treated through GBIS compared with the original assumption, but should enable more delivery overall than would take place without the change1. The department also states that with only a year until both schemes end, radical changes cannot be achieved1.
What happens next
The preferred option will be given effect via secondary legislation, due to be laid in May and come into force from July 20251. ECO4 and GBIS are due to end on 31 March 2026, with final reconciliation to be done at the end of the scheme in March 20261. The assessment says the increase in delivery will be measured by Ofgem, the scheme administrators1.