September 14, 2021

What is ECO4? – Energy Company Obligation 2022-2026

The Energy Company Obligation scheme is due to enter its next stage in April 2022 – meaning even more money is becoming available for sustainable heating, insulation and other energy refurbishments!

ECO4 is a 4-year scheme that will enable more effective planning, plus a significant increase in expenditure – £1bn a year. As before, it is focussed on low income, fuel-poor households in the owner occupier sector:

  • EPC Bands D, E, F, G
  • F and G properties to be upgraded to D, with D and E properties upgraded to C
  • Social Housing band E, F and G only
  • Private rented to be determined by outcome of BEIS consultation on minimum standards
  • Warm Homes Discount qualifying households will qualify for ECO4

With this stage of the scheme, the government intends to focus on installing packages of multiple measure in the worst affected homes. They will take a ‘fabric first’ approach, with a requirement to insulate homes to a minimum standard when heating is installed. Installers working on the scheme will need to be PAS2030:2019 and Trustmark accredited.

ECO4 will also bring an uplift for Hard to Treat properties to cover the cost of remedials and repairs to facilitate measures. This is limited to £1,000 per property and only available for owner occupiers in bands E, F and G.

The LA Flex that was introduced in ECO3 will be available still. So, local authorities can help households in fuel poverty, or at risk of being in fuel poverty, even if they don’t qualify for means tested benefits. Energy suppliers will be able to deliver up to 50% of their target through the LA Flex.

The scheme has a minimum target of 22,000 Solid Wall Insulation installs per year. This assumes no 3rd party contributions towards the cost, so these installs must be fully funded by ECO.

It’s important to note that there will be a cap of 5,000 on the repair of efficient heating systems, and a same size cap on replacement boilers. However, there is no cap on the replacement of inefficient systems! First time central heating work will also be restricted to on-grid homes.

Early delivery of measures will be allowed from April 2022 if the new legislation is not in place in time – we can’t wait!

For further details, or to join our installer network, email [email protected].

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