Energy Company Obligation to Improve Energy Efficiency in UK Homes

What is the Energy Company Obligation?

Energy Company Obligation (ECO) is a government funding stream that offers free grants towards a broad range of energy saving measures. Primarily the ECO scheme combats fuel poverty and upgrading hard to treat properties in both the public and private sector. The installation costs of critical home improvements such as insulation and heating are reduced for eligible householders who qualify due to living conditions and personal circumstances such as benefits, age and place of residence. Homeowners and tenants will be able to apply for the ECO Fund to provide free funding for energy saving measures such as a boiler replacements and insulation.

The scheme is part of the wider Green Deal initiative proposed by the Government; aimed at improving the energy efficiency of the UK’s building stock, reducing carbon emissions and supporting the UK’s 2050 emission reduction target.

How do you qualify for the ECO Fund?

There are three strands of the ECO Fund that homeowners and tenants are able to apply for:

Affordable Warmth

Affordable Warmth is a system designed to tackle fuel poverty amongst private sector householders. Homeowners and private tenants that are in receipt of certain qualifying benefits or on low incomes, will be able to access a wide range of subsidised energy efficiency measures. This strand of the ECO Fund mainly covers the installation of replacement boilers, a process in which an energy efficient condensing boiler will be fitted. The higher cost of replacing your boiler can often be the off putting part of this energy efficient transition, with the boilers often costing £100 to £200 more than non-condensing models. However the Affordable Warmth system will look to eradicate the financial burden of investing in a new boiler.

The Carbon Reduction Obligation (CERO)

If you happen to live in a hard to treat property that is usually unsuitable for installation work, you may be entitled to free Green Deal measures such as insulation. Funding will be provided to insulate solid-walled properties (internal and external wall insulation) and those with ‘hard-to-treat’ cavity walls. It is hoped that providing funding for the more expensive energy saving measures will help meet the Government’s targets to reduce Carbon levels over the next decade.

Carbon Savings Community Obligation (CSCO)

If you happen to live in a qualifying CSCO area, you may also be entitled to free heating efficiency grants on energy saving measures. The Carbon Saving Community Obligation is aimed at tackling the situation facing some of the most vulnerable households and those living in areas of highest deprivation. Many people within these properties are living in “Fuel Poverty”, a term defined as when people are spending more than 10% of their net monthly income on their energy bills.

Up until March 2015, the six large energy companies are obligated to invest around £1.3 billion a year to support the most vulnerable homes and communities. The first step is to have an assessment carried out on your property. A Green Deal assessor or provider can arrange this for you.

  • The Home Improver

    The Energy Companies Obligation (ECO) has changed since this article was written. The latest version is being launched in April 2017. Green Deal has since closed after being a massive flop and the existing finance book has been purchased by city financiers ready to be re-launched in 2017. There are some good companies out there who can help with Energy saving improvements to your home if you’re struggling to finance it yourself. These guys get good reviews http://www.boilergrants.co.uk