The Department for Energy Security and Net Zero (DESNZ) issued a statement on Thursday 23 January 2025 about potential issues with Energy Company Obligation (ECO) and Great British Insulation Scheme (GBIS) installations, according to Ofgem, which administers ECO4 on the department's behalf1.
Ofgem's scheme page records the statement and links to it, but does not set out its contents. The nature of the potential issues, how many installations may be affected, and which suppliers or installers are involved have not been reported in the material published by the regulator1.
ECO is described by Ofgem as a government energy efficiency scheme in Great Britain designed to tackle fuel poverty and help reduce carbon emissions1. It works by placing a Home Heating Cost Reduction Obligation on medium and large energy suppliers, whose overall target is divided between them based on their relative share of the domestic gas and electricity market1. The scheme supports energy efficiency measures in the homes of those considered to be in fuel poverty, including insulation and heating system upgrades1.
The current iteration, ECO4, came into force in July 2022 and applies to measures installed from 1 April 2022. It will run until 31 December 2026 following a nine-month extension1. Its predecessor, ECO3, closed on 31 March 2022, having commenced on 3 December 2018 with an overall Home Heating Cost Reduction Obligation target of £8.253 billion in cost savings1.
Responsibility for the scheme is split. DESNZ sets ECO4 policy and legislation; Ofgem calculates suppliers' obligations, processes notifications of completed retrofits, audits suppliers and reports progress to the Secretary of State; and TrustMark oversees quality assurance of retrofits to technical and consumer protection standards1.
"On Thursday 23 January 2025 the Department for Energy Security and Net Zero issued a statement about potential issues with ECO and GBIS installations"
Why it matters for households
ECO-funded work is delivered inside people's homes, so any question over installation quality bears directly on the fabric of the property and on the bills it was meant to reduce. Insulation and heating measures installed poorly can leave a home colder, damper or more expensive to run than before, and can affect the performance of the building itself.
For a household that has had work done under ECO or GBIS, the practical significance lies in who holds responsibility for the standard of that work. Under the current arrangements, quality assurance of retrofits is overseen by TrustMark, and Ofgem uses data shared by TrustMark to check compliance against scheme rules1. Ofgem also audits suppliers and their notifications to minimise non-compliance1.
The statement concerns potential issues rather than confirmed failures, and no detail of affected households, remedies or timescales appears in the regulator's published material1. Household energy independence rests partly on measures performing as intended for the life of the property, which is why the assurance chain matters as much as the funding itself.
What happens next
No next steps are set out in the material published by Ofgem beyond the statement itself, dated 23 January 20251. Ofgem continues to publish monthly reports on how suppliers are progressing against their obligations1.
Sources1 cited
- Energy Company Obligation (ECO) | Ofgem, ofgem.gov.uk