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Grants and Schemes

Understanding the ECO4 Scheme

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What is ECO4?

ECO4 is a UK government-backed scheme that aims to address energy efficiency concerns. It is the fourth phase of the Energy Company Obligation ECO scheme and is expected to provide grants and support totalling £4 billion over the four year period up to the end of March 2026, with annual funding of £1 billion.

The ECO grant scheme aims to provide free or significantly discounted energy efficiency measures to vulnerable households in England, Scotland and Wales, resulting in improved Energy Performance Certificate (EPC) ratings, a lower carbon footprint, and ultimately lower energy bills.

Funding for the scheme comes from the largest energy companies who are obligated to provide free grant funding that will support low income households and assist vulnerable households. The energy supplier funding will help the least energy efficient homes implement energy efficient upgrades that will impact on bills and reduce carbon emissions.

The government’s Energy Company Obligation ECO4 objective during this time is to ensure that all homes in the UK achieve a minimum EPC rating of D. Therefore, individuals residing in homes with an energy efficiency rating below this should consider applying for funding under the ECO4 scheme.

What energy efficient measures are funded by ECO4?

ECO scheme funding could be used to fund a range of energy efficient measures, such as home insulation and new heating systems to replace old inefficient boilers or electric storage heaters. This includes some of the following measures:

  • Loft insulation
  • Cavity wall insulation
  • Solid wall insulation
  • Other types of insulation
  • Boiler replacement
  • First-time central heating
  • Heat pumps (air source heat pumps and ground source heat pumps)
  • Other more energy efficient heating systems

 

ECO4 Eligibility Criteria

The eligibility criteria for ECO4 differ from the previous criteria for ECO3, with ECO3 placing more emphasis on actually receiving government benefits. ECO4, on the other hand, appears to give greater emphasis on household income and those at risk of fuel poverty, rather than just those receiving specific benefits.

To be eligible for support under ECO4, specific criteria must be met. The scheme does still help those who claim benefits access funding, but can also assist low income households in the most energy inefficient properties (in band D to G in terms of the Energy Performance Certificate).

List of eligible qualifying income related benefits to access ECO funding include:

  • Child Tax Credits (CTC)
  • Child Benefits – depends on income thresholds
  • Jobseekers Allowance (JSA)
  • Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Pension Credit Guarantee Credit
  • Universal Credit (UC)
  • Warm Home Discount Rebate
  • Working Tax Credit (WTC)
  • Housing Benefit
  • Pension Credit Saving Credit

 

Qualifying for funding under LA Fex Rules

Not qualifying for ECO4 funding because you don’t receive specific government benefits does not necessarily mean you won’t qualify for any support. If you are a low income household living and meet the minimum energy efficiency requirements, you may still qualify for support under LA Flex.

Local authorities and councils are granted additional flexibility to provide assistance to individuals in their local communities who require it the most. Energy suppliers can also utilise LA Flex to enhance support for customers who are experiencing difficulties in paying high energy bills caused by their home’s inadequate energy efficiency, resulting in increased heating costs. However, these customers may not qualify under ECO4.

Different eligibility criteria can be set by local councils under local authority flexible energy, but their aim is to support vulnerable households in energy inefficient properties, so their eligibility criteria typically align with this goal.

Applying for Energy Company Obligation Funding

If you believe you may qualify for ECO4 funding to improve energy efficiency, it is recommended to verify your eligibility with Fixx. We can check if you qualify for funding from the energy companies under the ECO4 scheme and provide assistance throughout the application process to ensure you receive any funding you are entitled to.

Does ECO4 cover the full cost of installations?

The amount of support you will receive when applying for an ECO4 grant varies on a case-by-case basis. Energy efficiency installers will help determine the energy efficient home improvements needed to raise your property’s EPC rating. Insulation measures are typically recommended for energy inefficient properties, but other measures may also be available under the Energy Company Obligation Scheme.

You may receive energy efficiency measures for free or at a reduced cost. Either way, you will save a significant amount on the cost of your eco home improvement with ECO4 grant support.

Savings on energy bills with eco measures

The amount of money you can save on your energy bills depends on various factors, including the size of your home, your current energy efficiency measures, and your daily home occupancy. Energy Saving Trust offers comprehensive guides on energy efficiency measures that can provide you with precise information on how much you could save money by using less energy. Below, we have gathered the most relevant information for your reference.

The potential annual savings for various energy efficiency measures are as follows:

  • solar panels (with Smart Export Guarantee payments) — £335-£525 in annual savings
  • an energy efficient boiler (based on a detached house) — £245-£540 in annual savings
  • underfloor insulation (based on multiple property types) — £50-£135 in annual savings
  • roof & loft insulation (from 0mm of insulation to 270mm) — £225-£415 in annual savings.

 

Figures are accurate based on Energy Saving Trust calculations made in October 2023, which reflect fuel prices at that time.

Can ECO4 grant support be used alongside other grants and schemes?

Measures funded under ECO4 cannot receive funding from any other grants or schemes. This policy is in place in order to prevent duplicate claims for the same energy saving measure.

In addition, the support provided by ECO4 is significant and should sufficiently cover the installation costs, eliminating the need for multiple grants and schemes to cover the same eco home improvement.

Can I get funding under ECO+?

ECO+ is an extension of the ECO schemes and focuses exclusively on insulation, specifically loft insulation and cavity wall insulation, rather than broader eco home improvements.

Also known as the Great British Insolation Scheme, it aims to improve insulation and increase thermal efficiency in energy inefficient homes, specifically targeting vulnerable households with low incomes, in order to reduce energy costs. ECO4 focuses on multiple different eco home improvements to enhance energy efficiency.

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