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), dated 7 April 2025. The preferred option will be given effect via secondary legislation, due to be laid in May and come into force from July 20251.
The changes follow a public consultation carried out in November 2024, from which 122 responses were received1. The agreed measures 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 does not allow multiple measures to be installed in one household, only a single measure1.
The department states the changes are intended to make it easier for energy suppliers to meet their obligation, which should reduce costs and increase the volume of contracts available in the market1.
"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, running between Spring 2023 and March 2026, and originally aimed to deliver 55,998,000 in annual bill savings1. The scheme covers EPC D to G properties across two eligibility groups, a low-income group and a general group1. Delivery figures to the end of December 2024 show 46,887 homes treated and 58,975 measures installed1:
| 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 reports that GBIS is proving more difficult and costly to deliver than originally 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 estimate of £1 billion1.
Why it matters for households
ECO4 and GBIS place a legal obligation on larger energy suppliers to deliver energy efficiency measures to eligible households, with the stated aims of reducing fuel poverty, improving security of energy supply and cutting household carbon emissions1. For a household, the practical effect of the changes is that a single GBIS project could now include two insulation measures rather than one, and that smart thermostats become available to the low-income group1. The department says installing loft and cavity wall insulation together, where possible, spreads fixed compliance costs over more measures and reduces the cost of delivering annual bill savings1. It also notes that allowing two measures may reduce the number of homes treated compared with the original assumption, but should enable more delivery overall than would take place without the change1. The scheme administrators, Ofgem, will measure delivery1.
What happens next
The secondary legislation is due to be laid in May and come into force from July 20251. The intention is to legislate so the changes are allowed from the date of the consultation publication, 14 November 20241. Both 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.