What is the ECO (Energy Company Obligation) scheme?
The Energy Company Obligation (ECO) scheme is a UK Government energy efficiency initiative designed to reduce carbon emissions and make homes more energy efficient.
The ECO was introduced in 2013 as part of the government’s commitment to meet its legally binding target of reducing greenhouse gas emissions by at least 80% by 2050, compared with 1990 levels. The main aim of the ECO is to help households save money on their energy bills while also helping the UK reach its climate change targets. It does this through providing financial support for home insulation projects which are targeted towards vulnerable households that struggle with high energy bills due to living in an inefficient home or having low incomes.
Under the scheme, registered suppliers must provide funding for these insulation measures and other improvements such as replacing old boilers with new ones that are more efficient, installing solar panels, heat pumps and providing advice on how people can use less energy in their homes.
Suppliers are required to meet certain obligations each year based on their market share; if they fail to do so, they must pay into a central fund which then distributes funds to other suppliers who have met their obligations.
Since it was introduced, there have been several changes made to the ECO scheme including expanding eligibility criteria so that even more people can benefit from it and increasing funding available for retrofitting homes with better insulation materials or renewable technologies like solar PV systems. In addition, since 2017 the government has been introducing ‘flexible eligibility criteria’ which allows local authorities greater flexibility when deciding who should be eligible for grants under this particular scheme rather than relying solely on income thresholds set nationally by central government departments such as DECC (Department of Energy & Climate Change).
The most recent development came in 2020 when Ofgem announced plans for a ‘Green Deal Finance Plan’ which will allow households across England, Scotland and Wales access up £10 billion worth of financing over 15 years — allowing them access loans repayable over time — making it easier than ever before for those struggling financially but still wanting improve the performance of their home without facing large upfront costs associated with traditional options such as grant-funded installation work or full internal wall cavity insulation works etc.
This plan is expected come into effect later this year and will undoubtedly prove hugely beneficial not just economically but also environmentally too given its potential impact upon our nation’s CO2 emission reduction goals going forward.
Overall then we can see that much progress has been made since 2013 when ECO first launched — both in terms of offering wider access via flexible eligibility criteria combined with increased financial assistance available — all ensuring that even more vulnerable households across Britain now have viable ways open up them up improving their own housing situation whilst simultaneously contributing towards tackling climate change issues.
