How ECO4 Funding Works
1st September 2022 | Grants & Schemes
Did you know that the UK government has begun a grant scheme to help the least energy efficient homes get free heating, insulation, and renewable energy grants?
The ECO4 scheme started in July 2022 and should go on through March 2026.
The programme is for families with low incomes or vulnerable households. Here, we explain how this new £4 billion energy efficiency award initiative works.
The Energy Company Obligation (ECO) is a policy that mandates energy providers to make UK households more energy-efficient and fight fuel poverty at the same time. It has been under construction since 2013, and the current phase is named ECO4.
What is the Energy Company Obligation (ECO?)
The Energy Company Obligation (ECO) is an initiative that requires energy providers to help consumers whose fuel bills are becoming unmanageable. It is a government scheme that mandates energy businesses to cut their carbon emissions and help the UK fulfil its Net Zero goals. The fourth stage of this programme is ECO4.
Since 2013, the plan has helped to improve more than 3.1 million homes; this final phase aims to accomplish much more.
As part of its Sustainable Warmth Strategy, the government has made the ECO grant available until March 2026, four years longer than before. The major purpose of this programme is to support low-income households who can’t afford to fix up their homes and heating systems.
By doing this, the government will be able to help vulnerable families live comfortably and help the country realise its goal of Net Zero by 2050.
What’s the difference between ECO4 and ECO3?
Even though phases three and four of the ECO scheme have a lot in common, the government intends to reach more people during this fourth phase.
Under ECO3, energy providers with more than 150,000 residential customers were obliged to support anyone who qualified. This is true for ECO4, but the government aims to get rid of obligation thresholds by setting up “a buy-out mechanism.” This means that even smaller enterprises will be allowed to join the scheme.
The government has modified the standards for ECO4 as it looks for methods to help low-income families that aren’t obtaining benefits.
According to the ECO4 survey, 46.1% of households that can’t afford to fuel their homes don’t get any benefits. The government claims in a vague way that it will “expand and reform local authority flexibility” to support these low-income populations, so that providers can meet up to 50% of their responsibilities this way.
At the same time, the government is taking away some ECO3 payments “to help better target households that are more likely to be low-income.”
Under ECO3, people could receive benefits that didn’t depend on how much money they made; this is not applicable under ECO4.
Disability Living Allowance (DLA)
Personal Independence Payment (PIP)
Allowance for Attendance
Allowance for Carers
Allowance for a severe disability
Industrial Injuries Disablement Benefit
Pensions for war
Mobility Supplement Constant Attendance Allowance
Payment for the freedom of the armed forces
What does ECO4 cover?
Depending on which energy company you choose, you could make a number of improvements to your property.
Look at the key areas of interest listed below to get an understanding of how ECO4 funding can benefit you.
Solid Wall Insulation
Before bringing in new heating systems, the ECO4 strategy is mostly about making the building itself better.
Before the heating systems in any home with an efficiency rating of “D” or lower can be improved, the loft, roof, and cavity walls that face the outside will have to be insulated.
The ECO4 report demonstrates that the government wants to insulate solid walls more than anything else. They intend to put up 22,000 solid wall insulation units each year.
Boiler upgrade
The government argues that so far, the project has not fixed any boilers or electric storage heaters. People are replacing efficient gas boilers after three to eight years, which is a considerable time before their estimated 12-year lifespan.
Because of this, ECO4 will offer consumers an incentive to set up their heating systems so that they use less energy when they can. Broken heating systems that can’t be fixed can be replaced through the Broken Heating Cap.
Installing greener heating systems
A major motivation for ECO4 is to get rid of old, broken boilers and replace them with ones that are better for the environment.
In order for the UK to achieve its objective of being Net Zero by 2050, coal-powered heating systems were left out of the ECO3 plan. ECO4 will preserve this restriction and add to the list of items that aren’t allowed heating systems that utilise oil or LPG.
Instead, the government will aim to get residents to replace their boilers with heat pumps and biomass boilers, which are better for the environment. ECO4 will also continue to put solar photovoltaics (PV) in all electrically heated homes, but only if a biomass machine or District Heat Network is not a possibility.
One of the key ways organisations decide who can join the ECO4 plan is by identifying any of the following qualifying criteria:
Allowance for job seekers based on income (JSA)
Employment and Support Allowance based on income (ESA)
Income Support (IS)
Credit Guarantee for Pension Credit Credit for working (WTC)
Tax breaks for kids (CTC)
Universal Credit (UC) (UC)
Credit for pensions and housing benefits Credit for Savings
The government will also make sure that everyone who gets supplementary benefits from the Department of Work and Pensions (DWP) can utilise ECO4, whether or not they receive Universal Credit.
Even though owner-occupied homes will be the major focus, this new part of the award will also help patch up inefficient public housing and private rental housing (if permitted by the landlord.)
By extending the ECO scheme for another four years, the UK government may help some of these vulnerable people navigate through the hard times ahead.
Think you are eligible for the ECO funding?
Get in touch with us, we have a friendly team on hand to help support you!