In the effort to combat fuel poverty and improve housing stock energy efficiency, the Energy Company Obligation (ECO) has been and remains to be a central policy instrument. Its current phase, ECO4 has spanned from 2022 up to 2026 and introduced critical changes aimed at deeper, long-term support. In this guide, we will unpack the core components of ECO4 guidance, including delivery mechanisms, eligibility, regulatory requirements, and administrative procedures.
Introduction to ECO4 Guidance
The Energy Company Obligation is a UK government energy efficiency program that requires energy suppliers to install energy-saving measures in homes. Now in it’s fourth phase, ECO4 expands upon the previous versions of the scheme by targeting low-income and vulnerable households for more substantial and long-term support.
Key objectives of ECO4 include:
- Reducing fuel poverty by improving energy efficiency
- Supporting the UK’s net-zero targets
- Delivering whole-house retrofit solutions
ECO4 Delivery Guidance
Key Delivery Mechanisms
ECO4 is guided by a “whole-house retrofit” model. Instead of single measures such as loft insulation, projects assess the property overall and implement any necessary multiple coordinated improvements.
These can include:
- Solid wall insulation
- Cavity wall and loft insulation
- Heating system upgrades
- Renewable heating such as heat pumps
Roles of Stakeholders
Energy Suppliers with more than 150,000 domestic customers are obligated to meet ECO targets. They can fulfil these by partnering with registered installers or by working with local authorities.
Local Authorities play an important role through “flexible eligibility” (LA Flex), allowing them to nominate households that don’t receive benefits but are still at risk of fuel poverty.
ECO4 Eligibility Criteria
Qualifying Households
Households are eligible if they:
- Receive qualifying means-tested benefits (e.g. Universal Credit, Income Support). For the full list, click below:
- Are identified by local authorities under LA Flex
- Live in properties with Energy Performance Certificate (EPC) ratings of D,E,F, or G (for owner-occupied homes)
Find out more about EPC’s here:
Find out what your EPC rating is:
Definition of Vulnerability
Beyond benefits, vulnerability to cold is recognized based on age, disability, or medical conditions made worse by poor housing conditions such as living in the cold.
Income Thresholds
Eligibility under LA Flex may also consider income thresholds (typically £31,000 gross annual income or less, depending on household size and location)
Ofgem ECO4 Guidance
Regulatory Framework
Ofgem oversees the implementation and enforcement of ECO4. It’s responsibilities include:
- Approving retrofit plans and installers
- Ensuring compliance with minimum insulation standards
- Monitoring carbon savings and cost effectiveness of installations
Installers must be TrustMark registered and adhere to PAS 2035:2019 retrofit standards, ensuring quality assurance and consumer protection.
Compliance Requirements
- Each home must improve by at least two EPC bands (e.g. from an E to a C)
- Specific rules govern measure selection, sequencing, and verification
- Ofgem may audit suppliers or installers at any point
ECO4 Administration Guidance
Implementation Procedures
Suppliers must:
- Submit monthly reports to Ofgem
- Demonstrate that work was completed by certified installers
- Collect and store photographic and documentary evidence
Installers must:
- Produce a Medium-Term Improvement Plan (MTIP)
- Provide homeowners with information on works and warranties
Monitoring and Reporting
Ofgem conducts:
- Random audit of project files
- Performance assessments
- Annual program reviews
Homeowners and tenants can verify an installer’s credentials here:
Future Directions
ECO4 is a representation of a more ambitious and integrated approach to tackling fuel poverty and carbon emissions. With a transition to whole-house retrofits, rigorous compliance requirements, and greater local authority involvement, understanding ECO4 guidance is essential for installers, councils, and eligible households alike.
Future updates may further align ECO4, or what could be known as ECO5, with wider government plans like the Clean Market Mechanism and net-zero to reach 2050 targets.
For any future updates on ECO or to apply for ECO4 yourself, visit Energy Advice Helpline.
