February 24, 2022

ECO4: What’s Changing?

You may not have heard, but the government is altering the way ECO operates. ECO3 will cease to exist on April 1, 2022, and ECO4 will take its place. These modifications and the reasons behind them are explained here. Grab a cup of coffee, settle down, and prepare to discover all there is to know about ECO4!

An initiative called the Energy Company Obligation (ECO) mandates energy providers to help reduce fuel poverty and increase energy efficiency in UK homes. For the past three years, it has been functioning under the name ECO3. Current rules expire on March 31, 2021, and new ones take effect on April 1, 2022.

There is presently a government consultation on the next phase, and this blog will explain the modifications that are being suggested, including who will be removed from the plan. You’ll learn all you need to know about ECO4’s upcoming phase.


What is the Energy Company Obligation scheme?

With the Energy Company Obligation (ECO), homeowners that are suffering with their fuel expenses are required to receive assistance from energy providers. In order to assist the UK fulfil its carbon reduction goals, it is a government effort that requires energy businesses to cut their carbon emissions.

As part of their responsibilities, energy providers are required to implement energy efficiency measures in houses across England, Scotland, and Wales, saving customers money over the course of their lives.

Over 3.1 million measures have been put in over 2.3 million houses since the Energy Company Obligation (ECO) was implemented in 2013.


What is ECO3?

The Energy Company Obligation (ECO3) is the current phase of the programme. It began on December 3 and will end on March 31 of the following year.

If you want to learn more about the scheme’s past phases, you may check out OFGEM’s website here.


What is ECO4?

Phase 4 of the Government’s Energy Company Obligation is known as ECO4. 1 April 2022 is when it is scheduled to begin, and it is scheduled to end on 31 March 2026.

For now, the Government is holding consultations on this last stage of the programme, which will see some adjustments to the qualifying requirements.

These are some of the modifications being considered in ECO4 right now:

  • Modifications to the benefits that qualify (removing a number of disability benefits)
  • It has been decided to change how many measures are to be placed under the Local Authority Flexible Energy Program (up to 50 percent of measures can be installed under council rules whereas it was previously capped at 25 percent )
  • Additional standards for improving the Energy Performance Certificate (EPC) have been recommended.
  • Boiler removal from the scheme


Changes to the benefits that qualify for ECO4

Several disability benefits would be eliminated from the new system, according to the government. Housing Benefit and Pension Credit Savings Credit will also be included in the new phase.

  • Income Based Jobseekers Allowance (JSA)
  • Income Related Employment & Support Allowance (ESA)
  • Income Support (IS)
  • Pension Credit Guarantee
  • Working Tax Credit (WTC)
  • Child Tax Credits (CTC)
  • Universal Credit (UC)
  • Housing Benefit (a new benefit making people eligible for ECO4)
  • Pension Credit Savings (another new eligible benefits for ECO4)

For ECO4, the following benefits will be removed from the eligibility list:

  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Constant Attendance Allowance
  • Disability Living Allowance (DLA)
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment (PIP)
  • Severe Disablement Allowance
  • War Pensions Mobility Supplement


Changes in the number of measures to be installed under the Local Authority Flexible Energy

Local Authority Flexible Energy laws permitted energy firms to use up to 25% of their commitment during ECO3 (Local Authority Flexible Energy is often called LA Flex). In order to determine their own eligibility criteria, councils can issue a statement of intent for flexible energy and the guidelines let households that do not claim benefits obtain financing.

Suppliers will be able to fulfil up to 50% of their ECO4 obligations through Local Authority Flexible Energy as part of the proposed revisions (so double the number previously allowable).


Requirements for an Energy Performance Certificate (EPC) upgrade

After the improvements have been implemented, the energy efficiency rating of the property must also increase by a minimum amount.

Energy Performance Certificate (EPC) grants are only valid if the property already has an EPC grade of F or G.

In order to get a grant, a property must have an Energy Performance Certificate (EPC) grade of at least C.

In theory, this technique will lead to more awards, as well as more energy-efficiency savings in the long run.

For the most inefficient dwellings, the Government is also proposing that a minimum number of properties in bands E through G would be updated.


Number of boilers offered reduced

New boiler subsidies will be available to a far smaller number of homes than before because of stricter limits on the sorts of boilers that qualify, which means that very few households will be able to take advantage of them.


Who should be concerned about these new developments in ECO4?

In the event that you now receive one of the qualified benefits that are being phased out, you should submit your application as soon as possible. As a general rule, we recommend applying as soon as possible because the entire application process might take several months in some situations (if for example a new gas line needs to be laid to the property). The benefits that will no longer be available include:

  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Constant Attendance Allowance
  • Disability Living Allowance (DLA)
  • Industrial Injuries Disablement Benefit
  • Personal Independence Payment (PIP)
  • Severe Disablement Allowance
  • War Pensions Mobility Supplement

Even if you get Housing Benefit in addition to these benefits, you may still be eligible for an ECO4 award if you visit our website as soon as possible to determine whether you qualify.

Additionally, homeowners with outdated, inefficient boilers should apply soon, as the new criteria only allow for a limited number of boilers to qualify, and if the threshold is met, boiler subsidies will no longer be available.