The Energy Company Obligation (ECO) is a UK government energy efficiency scheme that was established in 2013 to help reduce carbon emissions and tackle fuel poverty. The fourth phase of the scheme, known as ECO4, is intended to run from 1 April 2022 to 31 March 2026. The main objective of ECO4 is to improve the energy efficiency of the least energy efficient homes occupied by low-income and vulnerable households.
The program will be funded by a levy on energy suppliers and is designed to help the UK meet its legally-binding carbon reduction targets. The funding will be used to provide energy efficiency measures such as insulation, boiler replacement, and heating controls to low-income and vulnerable households. The scheme will have different targets for different types of measures, with a greater proportion of funding being directed to those households who are most in need.
The ECO4 scheme will include three main obligation types:
- Carbon saving obligation: This will be the core of the scheme, providing funding for energy efficiency measures such as insulation and heating controls.
- Carbon saving communities obligation: This will provide targeted support to specific areas of the country where there is a high concentration of low-income and vulnerable households.
Carbon saving for the private rented sector: This will provide funding to landlords to improve the energy efficiency of their properties.
The ECO4 scheme will also include a range of additional measures to help ensure that the scheme is as effective as possible. This may include measures to improve the quality of installations, and to ensure that the energy savings are delivered to those households who need them most.