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Energy Companies Obligation

Understanding ECO

The Energy Companies Obligation (ECO) was introduced in January 2013 to reduce the UK’s energy consumption and support people living in fuel poverty. It does this by providing energy efficiency improvements worth around £1.3 billion every year, funded by the UK’s major energy providers.

It will run until March 2015, supporting the installation of energy efficiency measures in low-income households, and in properties that are harder to treat with solid walls or narrow cavities. It works alongside the Green Deal to give consumers support and funding for energy efficiency improvements in their homes.

ECO replaced the Government’s previous funding initiatives, CERT (Carbon Emissions Reduction Target) and CESP (Community Energy Saving Programme) in 2013.

The Green Deal and the ECO will help reduce carbon emissions from the UK’s domestic building stock, which is an essential part of the UK’s plan to meet its statutory domestic carbon emission reduction targets by 2050. The UK 2008 Climate Change Act established the world’s first legally binding climate change target, to reduce the UK’s greenhouse gas emissions by at least 80% (from the 1990 baseline) by 2050. Moving to a more energy efficient, low-carbon economy will help us meet this target. It will also help the UK become less reliant on imported fossil fuels and less exposed to higher energy prices in the future.

Homeowners that qualify for state benefits or live in properties that are deemed as harder to treat can get ECO grants towards their domestic energy saving upgrades. Efficiency upgrades in harder to treat homes tend, by their nature, to be more expensive, A Green Deal assessment is still required for any improvements under ECO. Occupancy assessments will identify which residents are eligible for free ECO funding by reviewing their living conditions and personal circumstances, for example, age and benefit entitlements. 

Under ECO, the main concentration of efforts for the energy companies will be on the harder to treat homes and other measures that cannot be fully funded through the Green Deal. Solid wall insulation and narrow cavities will be the main areas of focus, so potentially thermal upgrades may be available through either internal or external wall insulation systems. 

For more information, visit the gov.uk website