The ECO4 scheme replaces previous energy-efficiency grants with a single, income-based programme running until March 2026
The Energy Company Obligation (ECO) scheme is now in its fourth phase, known as ECO4. Ofgem, the scheme administrator, states ECO4 began in April 2022 and will close to new applications on 31 March 2026 (GOV.UK, 2026).
ECO4 is funded by the UK’s largest energy suppliers, not by general taxation. It is the fourth phase of the Energy Company Obligation, consolidating measures from ECO3 and the Green Homes Grant. The goal is to upgrade the least energy-efficient homes (EPC bands D, E, F, or G) occupied by low-income or vulnerable households (Ofgem, 2026).
The specific cost savings ECO4 delivers depend on the measure installed, not a fixed cash payout
ECO4 is a “whole-house” scheme, meaning multiple measures are often installed together to maximise efficiency. For a typical gas-heated semi-detached home moving from EPC band E to C, the Energy Saving Trust estimates annual savings of £300–£600 on heating bills (Energy Saving Trust, 2026).
A full cavity-wall insulation installation (if eligible) can save a typical home £300–£400 per year, per EST data. Loft insulation (top-up from 100mm to 270mm) can save around £35–£50 per year for a gas-heated home (Energy Saving Trust, 2026).
Quick numbers – typical costs, savings, and payback for the main ECO4 measures
| Measure | Typical installation cost (if paid privately) | Annual energy saving (typical gas-heated home) | ECO4 payback period (vs. private cost) |
|---|---|---|---|
| Cavity-wall insulation | £500–£1,500 | £300–£400 | 1–4 years (free under ECO4) |
| Loft insulation (top-up) | £300–£600 | £35–£50 | 6–17 years (free under ECO4) |
| External-wall insulation (solid wall) | £8,000–£15,000 | £400–£700 | 11–38 years (free under ECO4) |
| Air-source heat pump | £7,000–£13,000 | £200–£400 (vs. electric heating) | 18–65 years (free under ECO4) |
| Solar PV panels (3.5kW system) | £5,000–£7,000 | £200–£300 (electricity offset) | 17–35 years (free under ECO4) |
All figures are illustrative for a typical 3-bed semi-detached home with gas central heating (except heat pump vs. electric). Sources: Energy Saving Trust, “Home energy efficiency: costs and savings” (2024–2026 update); MCS register; DESNZ, “Household Energy Efficiency Statistics” (2025 release).
The direct answer to “what is the ECO4 scheme?” – it is a free home-energy-upgrade programme for low-income households
ECO4 provides fully funded insulation, heating, and renewable-energy measures to eligible UK homeowners and private tenants. The scheme is legally mandated by the UK government and delivered by obligated energy suppliers (e.g., British Gas, E.ON, Octopus, Scottish Power).
Measures are installed at no upfront cost to the household. The cost is recovered through a small levy on all energy bills, around £20–£30 per year per household (GOV.UK, 2026). Eligibility is based on receiving a qualifying means-tested benefit (e.g., Universal Credit, Pension Credit, Child Tax Credit) or being referred via a local authority’s “Flex” route (GOV.UK, 2026).
Eligibility for ECO4 hinges on your home’s energy performance and your household income or benefit status
Your home must have an Energy Performance Certificate (EPC) rating of D, E, F, or G (the lowest three bands). You must either receive a qualifying means-tested benefit or be referred by your local council under the “ECO4 Flex” route (which considers low income or vulnerability).
Qualifying benefits include Universal Credit, Pension Credit, Income Support, Child Tax Credit (with income below threshold), and Housing Benefit, among others (GOV.UK, 2026). Owner-occupiers and private tenants (with landlord permission) are eligible. Social housing residents are not (Ofgem, 2026).
how to check your EPC rating online
You must use an MCS-certified installer for ECO4-funded heat pumps and solar panels
All renewable-heating and solar-PV measures installed under ECO4 must be carried out by an installer registered with the Microgeneration Certification Scheme (MCS). Insulation measures (cavity wall, loft, solid wall) require an installer registered with a Competent Persons Scheme (e.g., BBA, CIGA, or SWIGA for cavity wall; INCA for external wall).
You can find MCS-certified installers via the MCS register (mcscertified.com) or your energy supplier’s approved contractor list. The installer must also be TrustMark registered for all ECO4 work. This provides consumer protection and a complaints process (TrustMark, 2026).
how to check if your installer is TrustMark registered
The application process is handled by your energy supplier, not by a government agency
You do not apply to the government for ECO4. You contact your energy supplier (or any supplier with ECO4 obligations) and request a free home survey. The supplier will assess your home’s EPC, your benefit status, and the most cost-effective measures to install.
You can also approach a local-authority “Flex” scheme if you do not receive benefits but meet low-income criteria set by your council (GOV.UK, 2026). Once approved, the supplier arranges the installation. You sign a consent form, and the work is completed at no cost to you. The scheme closes to new applications on 31 March 2026, so you must act before this date (Ofgem, 2026).
