ECO (Energy Company Obligation)

big six image_Layout 1What is the Energy Company Obligation (ECO)?

ECO is an energy-efficiency programme which was introduced in the UK in January 2013. It replaces two previous schemes: the Carbon Emissions Reduction Target (CERT) and the Community Energy Savings Programme (CESP).

ECO is designed to work alongside the Green Deal to help certain groups of people install energy-efficiency measures to their homes. Under ECO the larger energy suppliers are legally obliged to help the target groups install energy-efficiency measures. These groups include:

  • Low income and vulnerable households.
  • Homes in low income areas.
  • Properties that are hard-to-treat.
  • Homes that may not qualify or benefit from the Green Deal.

The scheme consists of three parts:

1. Carbon Emissions Reduction Obligation

Here, the energy companies must focus on hard-to-treat homes and measures that cannot be fully funded under the Green Deal. Solid wall insulation and hard-to-treat cavity wall insulation are the main areas for focus under this target.

2. Carbon Saving Community Obligation

Energy companies are required to offer insulation and connections to domestic district heating systems which supply low-income areas. There is also a sub-target, which requires a minimum of 15% of each energy company’s Carbon Saving Community Obligation must be achieved by promoting measures to low income and vulnerable households in rural areas.

3. Affordable Warmth Obligation

Energy companies have an obligation to provide measures to facilitate the heating of low-income and vulnerable households. This includes actions that result in heaving savings, such as the replacement or repair of a boiler.

The government estimates that, under the ECO, £1.3 billion worth of energy efficiency and heating measures will be delivered across the UK per year.

ECO and the Green Deal

Funding under ECO may be available to subsidise your Green Deal. ECO funding is available for relatively costly energy-efficiency measures where the savings on your electricity bill may not be equal to or greater than the cost of the measures. For instance, solid wall insulation and ‘hard to treat’ cavity wall insulation are both eligible for ‘top up’ ECO funding to pay for its installation as part of the Green Deal.

It is quite complicated to work out if you are eligible for ECO funding. What measures your house needs, where you live and whether you receive benefits all have a bearing. Your energy supplier or your Green Deal Provider or Assessor will advise you if you are eligible for ECO funding. You can also contact the Energy Saving Trust  for more details.