New ECO funding scheme on its way

New ECO funding has been confirmed by the Department for Business Energy and Industrial Strategy (BEIS) and the Chancellor Rishi Sunak. The fourth phase of the government-backed Energy Company Obligation (ECO) scheme will run over 4 years, with ECO grants available under ECO4 until the end of March 2026.

As previously, ECO funding will focus on improving the energy efficiency of the UK homes that need it most. ECO grants are funded by energy suppliers to help people save money on their bills, and to cut energy waste.

New ECO4 funding will provide:

£3 billion for people who are in ‘fuel poverty’ – this will help those who are struggling to afford to heat their homes.

£200 upfront discount on energy bills – to help eligible households cover soaring energy price rises in 2022. It will be paid back through energy bills over 5 years.

£150 Council tax rebate – for 20 million homes in council tax bands A to D (including most rented properties) to help people manage rising costs.

Discretionary fund of £150 million – for Local Authorities to support those in greatest need who don’t qualify for the Council Tax discount.

Expansion of the Warm Homes Discount Scheme – this scheme can offer people a one-off discount of around £150 on their Winter electricity bill1. A discount on the gas bill may be available instead if the energy supplier provides both gas and electricity.

No VAT changes to energy bills – there is a possibility the government will remove the tax completely. VAT on energy bills is currently charged at 5%, so this could lower prices for customers2.

What’s different about ECO4?

The new ECO funding scheme will focus on a property’s EPC (Energy Performance Certificate) to ensure the home can gain maximum benefit from any energy saving measures installed.

These days, EPCs are built in to selling, renting and buying a property, so most homes will already have one. An EPC rates the property’s energy efficiency by taking into account things like whether it’s double glazed, if it has insulation, and its type of heating system.

An EPC rating can show how much energy the home is using (and potentially wasting), with A and B being a very efficient property, and an EPC of D or E being very low efficiency.

ECO4’s aim is to help UK homes achieve an EPC rating of at least a C.

However, this can’t be done with insulation alone. To make this possible, ECO4 will encourage landlords, homeowners and contractors to use a variety of energy saving measures to upgrade properties.


Do you know your home’s EPC?

You can find out here

Delivering a ‘whole house’ solution

There will be a scoring scheme for ECO grants that takes a ‘whole house’ approach, based on carrying out more than one improvement to the property3. The aim is to create all-round home energy efficiency, from roof and windows to walls to heating.

Being able to save energy all around the house will help to reduce the energy bills of people who struggle to afford to keep themselves warm at home. It will also help to protect families against the effect of rising energy prices.

The drive to decarbonise UK homes

Government data shows things are already changing in our homes4. Over 324,000 energy efficient measures were installed in over 137,000 homes in 2020. The majority of these were designed to reduce energy waste from homes, such as installing insulation.

Jess Ralston, Analyst at the Energy and Climate Intelligence Unit (ECIU), said,

“The uptick in efficiency installations is good news, but still falls well short of the pace needed to make our homes Net Zero ready … much more is needed to deliver a decarbonised housing stock.”

Save energy and reduce your bills

Ask us if the new ECO funding could cover the cost of your home insulation* and more. We can also check to see if your Local Authority or council is running a grant scheme in your area to help warm up local homes.

Whether or not your household qualifies for funding under ECO4, we’re here to help you live a more energy efficient life.

We’re getting ready to install heat pumps and solar PV systems alongside our insulation, and we’re committed to helping UK homes cut carbon emissions and meet Net Zero targets.

News Flash > VAT cut on insulation. Pay 0% on energy efficiency installations. Find out more >


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