Nearly 1,000 households received defective loft or cavity-wall insulation under the ECO4 scheme last year, a programme meant to cut energy bills, not create damp patches. The Department for Energy Security and Net Zero confirmed the figure to the BBC last week, alongside a new enforcement protocol that lets local authorities compel installers to fix substandard work within 30 days.
The move follows months of complaints logged with Citizens Advice and the Energy Ombudsman, as reported by GOV.UK. The government is now acting to protect households with poor-quality insulation, but the wider lesson for homeowners is that not all free upgrades are risk-free.
Who qualifies, and who doesn’t
ECO4 targets low-income households, those on means-tested benefits, and homes with an EPC rating of D or below. A typical installation covers cavity-wall, loft, or underfloor insulation, plus boiler upgrades and first-time central heating. The scheme pays for itself via an annual levy on energy suppliers, about £24 per household per year, according to Ofgem.
But the quality problem is concentrated in cavity-wall work. Poorly installed fill can trap moisture, leading to penetrating damp and mould. The new enforcement protocol gives councils the power to issue a ‘remedial notice’ when an inspector finds defective work. Installers then have 30 days to return and fix it, or face a ban from future ECO4 contracts.
The catch is that the protocol applies only to installations completed after 1 April 2024. Homes insulated earlier in the scheme, which launched in 2022, fall under a weaker complaints process. Homeowners should check their installation date on the TrustMark certificate they received at completion.
What it costs a typical 3-bed semi
For a household that received defective insulation, the financial damage can be significant. Damp remediation costs typically range from £1,500 to £5,000, depending on severity. Lost energy savings, the insulation was supposed to cut heating bills by 15–25%, add another £200–£400 a year for a gas-heated semi-detached home using 12,000 kWh.
The government has not announced a compensation fund. Instead, it is relying on the remedial notice system and the existing ECO4 quality-assurance framework run by Ofgem and TrustMark. Homeowners who suspect defective work should contact their energy supplier first, then escalate to the Energy Ombudsman if no action is taken within eight weeks.
Yet the EPC impact is the silent problem. A home with botched insulation may have its EPC rating artificially inflated on paper, because the assessor relies on the installation certificate rather than a physical check. If the insulation fails later, the rating drops, and so does the property’s value and mortgage eligibility. The government’s own data shows that 12% of cavity-wall installations fail within five years.
What this means for future ECO4 grants
The enforcement action signals a hardening of standards. Installers who fail the new protocol will be struck off the TrustMark register, which is effectively a licence to operate in the scheme. That reduces the pool of available contractors, potentially lengthening wait times for new applicants. The Energy Saving Trust estimates that 120,000 households are currently on waiting lists for ECO4-funded insulation.
For homeowners considering a self-funded upgrade, the lesson is to demand photographic evidence of the finished work and a written guarantee from the installer. The government’s own guidance recommends a minimum five-year warranty for cavity-wall insulation. If your installer offers less, walk away.
Households that received defective insulation under ECO4 should contact their energy supplier by 31 March 2025 to ensure they fall within the new remedial window. Those with older installations should still lodge a complaint, but may need to rely on the Ombudsman rather than the new protocol. The clock is ticking: the scheme closes to new applications on 31 July 2026.
Frequently Asked Questions
Look for signs of damp, mould, or cold spots on internal walls within 12 months of installation. You can also request a free inspection from your energy supplier or a TrustMark-approved surveyor. The government's new protocol applies only to installations completed after 1 April 2024.
There is no automatic compensation fund, but you may be entitled to remedial work or a refund if the installer fails to fix the defect within 30 days of a local authority notice. Escalate complaints to the Energy Ombudsman if your supplier does not respond within eight weeks.
