ECO4 payment delays leave solar installers in crisis

The price of a solar panel system for a typical 3-bed semi now starts at £5,000. But thousands of households waiting for ECO4-funded installations may soon find their projects stalled, not by supply chains or planning, but by payment delays hitting the very installers they rely on.

As reported by Business Matters, SME solar installers are being left out of pocket as ECO4 green energy payments stall. The scheme, built to help low-income households improve energy efficiency, is meant to pay installers after work is completed. But delays in processing claims are leaving small firms unable to pay staff or suppliers.

Why ECO4 matters for your solar installation

ECO4 (Energy Company Obligation 2022-2026) requires larger energy suppliers to fund energy-saving measures for eligible households. Solar panels, insulation, and heat pumps are all covered. For a household on benefits or with a low income, this can mean a fully funded system worth £5,000–£10,000, no upfront cost.

But the scheme relies on installers fronting the cost of materials and labour, then reclaiming the money from suppliers. When those claims are delayed by weeks or months, small businesses, often with thin margins, cannot sustain the gap. The result: some installers are refusing new ECO4 work, or going under entirely.

The catch is that homeowners who have already signed contracts or paid deposits may be left in limbo. Ofgem, which oversees the scheme, has not published official data on the scale of payment delays. But installer trade bodies report that some firms are owed over £50,000.

What this means for your household budget

If you are eligible for ECO4 and planning solar panels, the immediate risk is that your chosen installer may not be able to complete the work. If they go out of business, you could lose your deposit, typically 10–20% of the total cost, and face months of delays finding another accredited firm.

Even if your installer survives, the delays may push them to raise prices for non-ECO4 customers to cover their cashflow shortfall. That could mean a typical 4kW solar system costing £5,000 today might rise by 10–15% as installers rebuild margins.

For households not eligible for ECO4, the disruption is indirect: fewer installers available means longer wait times for quotes and installations. Some may need to book months ahead, especially in summer when demand peaks.

Who qualifies, and how to protect yourself

ECO4 eligibility is means-tested. Households on certain benefits (Universal Credit, Pension Credit, Income Support) or with a total income under £31,000 qualify. The scheme also prioritises properties with an EPC rating of D or below.

To protect yourself, take three steps before signing any contract:

• Check the installer’s ECO4 accreditation, they must be registered with a government-approved certification body such as MCS or TrustMark.
• Ask about payment terms, avoid paying large deposits upfront. The Energy Saving Trust recommends no more than 20%.
• Confirm the supplier, your installation must be linked to a specific energy supplier (e.g., British Gas, EDF, Octopus). If the supplier changes, the funding may be delayed.

Ofgem has said it is working to speed up payment processing, but no timeline has been given. Households should expect delays and plan accordingly.

What you should do now

If you are already in the ECO4 pipeline, contact your installer immediately to ask about the status of their payments. If they are owed money, ask for a written update on your installation date. If you are still shopping around, get at least two quotes and verify each installer’s financial health, ask how long they have been in business and whether they have had payment issues with ECO4.

For those considering solar panels outside ECO4, the market remains strong. Installers not dependent on the scheme are still operating normally. But expect lead times of 6–12 weeks. The government’s Boiler Upgrade Scheme (for heat pumps) and the Smart Export Guarantee (for selling excess solar power) remain unaffected.

Households on standard tariffs can apply for ECO4 through their energy supplier from today. But with payment delays unresolved, the safest course is to wait until the bottlenecks are cleared, or choose an installer with a proven track record of completing ECO4 claims within 30 days.