Fuel Rights Handbook 21st editionChapter 12: Energy efficiency and other sources of help1. National energy efficiency schemes Energy Company Obligation
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Energy Company Obligation
The Energy Company Obligation (ECO) is a UK government energy efficiency scheme designed to help reduce carbon emissions and tackle fuel poverty by placing legal obligations on larger energy suppliers to deliver energy efficiency measures to domestic premises. ECO is distributed via a grant and is paid for by a levy on all domestic electricity bills.
ECO4 commenced on 1 April 2022 and will run until 31 March 2026. Through targeted support, it aims to reduce the number of supported households by focusing on the lowest-income households in the worst-quality properties. ECO4 is being delivered consistently across Great Britain.
Home Heating Cost Reduction Obligation
This is the sole focus of ECO4 and is also known as the Affordable Warmth Obligation. It provides free heating and hot water saving measures (eg, electric storage heaters), insulation (eg, cavity wall insulation), glazing and some micro-generation technologies to low-income and vulnerable households.
If you live in social housing, you might be eligible for help with insulation or installing a heating system if your home has an energy efficiency rating of E, F or G. Contact your local council to find out if it is taking part in the scheme.
You are eligible if you are an owner-occupier or live in a private rented property (although you will need the landlord’s permission) and a member of your household gets a qualifying benefit. At the time of writing, this included the following benefits (check gov.uk/energy-company-obligation for the latest information):1Sch 2 The Electricity and Gas (Energy Company Obligation) Order 2018 No.1183
    •child benefit;
    •universal credit;
    •pension credit (guarantee credit or savings credit);
    •income-related employment and support allowance;
    •income-based jobseeker’s allowance;
    •income support;
    •tax credits (child tax credit and working tax credit);
    •housing benefit.
If you own your home, it must have an energy efficiency rating of D, E, F or G. If you rent from a private landlord, the property must have an energy efficiency rating of E, F or G.
 
1     Sch 2 The Electricity and Gas (Energy Company Obligation) Order 2018 No.1183 »
LA Flex
LA Flex utilises local authorities’ localised and communal knowledge to target residents who may benefit from ECO4, but are not captured within the scheme’s standard eligibility criteria (see above).1Ofgem, ECO4 and GBIS Flex Local Authority Guidance, 10 April 2024 LA Flex can help if you are a ‘fuel poor’ owner-occupier or private tenant, are not in receipt of eligible benefits and are vulnerable to the effects of living in a cold home.2Department for Business, Energy and Industrial Strategy, Energy Company Obligation: ECO3, 2018-22 Flexible Eligibility Guidance, February 2019 In addition, some non-fuel-poor homes are eligible for solid wall insulation projects, as long as a proportion of the households in the project are in fuel poverty or living in the cold.
Local authorities set their own criteria to determine which households are supported. Funding is only available to owner-occupiers and private rented sector tenants. If a local authority decides to participate in the scheme, it must publish a statement of intent on its website.
 
1     Ofgem, ECO4 and GBIS Flex Local Authority Guidance, 10 April 2024 »
2     Department for Business, Energy and Industrial Strategy, Energy Company Obligation: ECO3, 2018-22 Flexible Eligibility Guidance, February 2019 »