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Energy Company Obligation scheme reforms

The Energy Company Obligation (ECO) scheme is entering a period of change with an increased focus on low-income and vulnerable homes.

As from April 2017, energy companies will be required to provide more help to struggling households, including free energy efficiency measures to make their homes warmer and bring their bills down.  The decision comes following the results of the “ECO: Help to Heat” consultation, which ran from July to August 2016. 

The ECO scheme, which creates a legal obligation on energy suppliers to improve the energy efficiency of households, is to be extended for 18 months (to September 2018) and will offer a more simplified and targeted approach, aimed at including more households which are in fuel poverty, on lower incomes or are struggling to pay meet the costs of their heating and other bills. 

Key changes

  • The Affordable Warmth Group will be increased from 4 million households (in consultation) to 4.7 million households.
  • Certain measures under Affordable Warmth will be extended to social housing in EPC bands E, F or G.
  • The introduction of the ‘flexible eligibility’ mechanism will give local authorities a role in determining eligible homes and matching them with suitable energy suppliers. 
  • The requirement to deliver a minimum level of solid wall insulation will be increased to 21,000 measures per year (the consultation proposed 17,000 measures per year)
  • Rural delivery will be protected.  15% of Carbon Emission Reduction Obligation will be delivered in rural areas.
  • Simplification of administration. ‘Deemed scores’ will be introduced in place of the current Standard Assessment Procedure (SAP) methodology.

You can find out more about the consultation outcome here.

Government comment

Minister for Energy & Industry, Jesse Norman said:

“The government is committed to tackling fuel poverty, and a key part of that is to help people keep bills down by living in more energy efficient homes. These changes will move the UK a further step towards the goal of insulating a further 1 million homes by 2020.

“There will be continuing protection for the delivery of energy efficiency measures in rural areas, with a requirement that 15% of suppliers’ Carbon Emission Reduction Obligation be delivered in these areas.  ECO has proved a very effective delivery mechanism with over 2 million measures installed in around 1.6 million properties between 2013 and the end of November 2016.”


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