Why Did the UK Government Announce the ECO4 Scheme?

To improve the energy efficiency of UK households, reduce energy bills, and alleviate fuel poverty, the UK government decided to extend the Energy Company Obligation scheme in the form of 4th iteration as ECO4 in 2022. 

This scheme targets low-income households who are residents of low-energy-efficiency properties. In 2025, the scheme aims to meet fuel poverty targets and accelerate to Net zero targets. 

In this article, we will be exploring the objectives of the UK government behind announcing the ECO4 scheme. We will also describe the important details of the scheme such as eligibility criteria, application process, and covered measures. 

Government Objectives Behind ECO4 Scheme

The ECO4 scheme serves multiple purposes for the UK government, one of them being building strongly from the COVID-19 pandemic. Another purpose of the ECO4 scheme is to alleviate fuel poverty by providing incentives to make UK households energy-efficient. 

This scheme is also a major contributor to the UK government’s objective to become a green energy superpower by 2030 and accelerate towards net zero. 

Let’s have a detailed look at these objectives:

1. Make UK Homes Energy Efficient: In the nippy weather of the UK, it becomes challenging to keep the homes warmer. The heating systems generate heat but most of the heating escapes through the uninsulated walls and lofts. This scheme provides insulation measures to make homes energy-efficient and heat remains in the home, so heating systems do not have to burn fuel continuously. 
2. Reduce Energy Bills: ECO4 provides energy-efficient heating systems to eligible households to reduce heating costs. According to the UK Parliament, British households spend 8.8% of their income on energy bills. To help such homes reduce their energy costs, the government provides condensing and highly efficient boiler systems and central heating systems. 
3. Alleviate Fuel Poverty: The rising fuel prices are a major concern for UK households. The British government started this scheme to install heating systems that use up to 98% of the fuel to generate heating as compared to old heating systems which use only 65% to 70% of the fuel and the rest of the fuel gets wasted. After Putin invaded Ukraine, the UK was the most affected by rising fuel prices. The ECO4 is determined to alleviate fuel poverty by providing energy-efficient heating systems. 
4. Move to Renewable Energy Sources: The ECO4 scheme provides grants to eligible households to install renewable energy heating systems like air source heat pumps. These heat pumps use heat from outside air, use energy to compress it (to raise the temperature) and distribute it to provide heating to the central heating system and hot water for domestic use. 
5. Make Britain a Green Energy SuperPower: The ultimate goal of this scheme is to reduce carbon emissions caused by residential heating and make Britain a green energy superpower. The target is to become net zero by 2030 and ECO4 is the major contributor towards the goals. 

To meet these targets and objectives, the UK government has allocated funding of £1bn/annum. The government has also introduced ECO4 flex, which enables local authorities to identify those most in need of energy efficiency measures but do not meet the eligibility criteria. Local councils can make the criteria flexible to help vulnerable households. 

Eligibility Criteria For ECO4 Scheme

As the ECO4 scheme is designed for low-income and vulnerable households, authorities have set eligibility criteria so that only qualified households are served first. 

The government uses the LILEE (Low-Income & Low-Energy-Efficiency) indicator to identify the eligibility of homes for the scheme. 

Here are the general eligibility criteria for the ECO4 scheme:

1. Benefit Recipient: homeowners or tenants who receive financial assistance are eligible for energy efficiency grants. Here is the list of qualifying benefits for eligibility:
   1. Income Based – Jobseekers Allowance (JSA)
   2. Income Related – Employment and Support Allowance (ESA)
   3. Income Support Allowance (ISA)
   4. Working Tax Credit (WTC)
   5. Child tax credit (CTC)
   6. Universal Credit (UC)
   7. Pension Guarantee Credit
   8. Pension Savings Credit
2. The Boiler System Installed Before 2005:  If you are interested in replacing your old and inefficient boiler system with an advanced condensing boiler, your existing system must be installed before 2005. This criteria does indicate the age of the boiler but its efficiency and performance as boilers before 2005 were of non-condensing type. 
3. Property Must Have a Gas Mater Installed Before April 2022: This eligibility requirement is for boiler installation only, if you are applying for a heat pump or first-time central heating system, you do not require a gas meter to be installed. 
4. Property Must Have an EPC Rating of D or Lower: The Energy Performance Certificate shows how energy efficient your property is where A indicates high efficiency while G indicates lowest. Households with EPC ratings between D, E, F, and G can qualify for these schemes. 
5. Low-Income Criteria: homes with household income lower than £31000/annually are eligible to apply for these grants. 

If you meet the above-mentioned criteria, you can get multiple energy efficiency and heating measures. 

Measures Covered Under ECO4 Scheme

The Energy Company Obligation Scheme provides heating and energy efficiency measures like boiler upgrades, and central heating systems, heat pumps, and insulation measures. All of these measures serve different purposes, here is a detailed overview of these measures:

1. Free Boiler Grants: these grants are designed to replace old inefficient boilers and also install new boilers where renewable energy sources are difficult to install. 
2. First-Time Central Heating Grants: these grants cover entire central heating systems for eligible households. This grant is for homes with no existing central heating system. 
3. Air-Source Heat Pump Grants: ASHPs are installed at properties with no gas meter. Off-gas grid properties are especially preferre for heat pump installations. 
4. Insulation Grants: ECO4 provides insulation measures to improve the energy efficiency of properties. Measures include loft insulation, cavity wall insulation, and others. 

Application Process

The application process is quite simple for ECO4 grants. Visit ECO Energy Services and follow the process. 

1. Use the Eligibility Calculator: answer qualifying questions to help determine your eligibility for grants. 
2. Fill Out Contact Form: Provide your contact details so our experts can reach out to you. 
3. Schedule Property Assessment: Safe Gas experts will visit your home for energy efficiency evaluation. This will determine your qualification for the scheme. 
4. Prepare Documents: Property ownership, tenancy agreements, and income proof should be provided. Other documents might be require as well. 

Once everything is provided, ECO Energy Services will apply on your behalf. Once approved, energy efficiency measures will be installe at your property. 

Final Thoughts

To conclude the topic, the UK government is striving to make household energy efficient and comfortable. The government is on a mission to alleviate fuel poverty and reduce carbon emissions. For this purpose, they have taken various initiatives, ECO4 is one of them. 

This article has explored some objectives ECO4 helps the government to achieve. We have also provided its eligibility criteria and application process for your ease. We think this will prove helpful for you to make the decision.