The ECO4 scheme covers energy-efficiency improvements for low-income and vulnerable households, including insulation, heating upgrades, and renewable technologies, funded by obligated energy suppliers (GOV.UK, 2026).
ECO4 is the fourth phase of the Energy Company Obligation, running until March 2026. It targets fuel-poor homes with an Energy Performance Certificate (EPC) rating of D, E, F, or G. The scheme funds measures that reduce heating demand and carbon emissions, but eligibility depends on household income, property type, and existing heating system. It does not cover cosmetic upgrades or repairs unrelated to energy efficiency.
Insulation measures funded under ECO4
The scheme prioritises fabric-first improvements. Loft insulation, cavity wall insulation, and solid wall insulation (internal or external) are covered. Floor insulation and room-in-roof insulation are also eligible. The Energy Saving Trust notes that cavity wall insulation can save a typical home around £285 per year on heating bills (Energy Saving Trust, 2026). Solid wall insulation costs more but delivers savings of up to £455 annually for a gas-heated semi-detached house. All installations must meet PAS 2030/2035 standards, certified by TrustMark or MSC.
Heating system upgrades included
ECO4 covers replacing inefficient heating systems with low-carbon alternatives. Air source heat pumps, ground source heat pumps, and solar thermal panels are funded. Biomass boilers are allowed in off-gas areas. The scheme does not cover gas or oil boiler replacements unless a heat pump is deemed unsuitable. Ofgem states that a typical air source heat pump installation costs between £7,000 and £13,000, with ECO4 covering the full cost for eligible households (Ofgem, 2026). The heat pump must have a Seasonal Coefficient of Performance (SCOP) of at least 2.8.
Renewable technologies and smart controls
Solar photovoltaic (PV) panels are covered if the property has a low EPC rating and the household uses electric heating. The Energy Saving Trust says a typical 3kWp solar array generates around 2,650 kWh per year (Energy Saving Trust, 2026). Smart heating controls, such as programmable thermostats and zone controls, are also included when installed alongside a funded heating system. ECO4 does not cover battery storage or electric vehicle chargers. All renewable installations must be MSC-certified and comply with the Microgeneration Certification Scheme (MCS) standards.
A worked example
A typical 1930s semi-detached home in Manchester with an EPC rating of E could receive cavity wall insulation, loft insulation, and an air source heat pump under ECO4, with the total upfront cost after the £7,500 BUS grant and full ECO4 funding dropping to roughly £2,000. The Energy Saving Trust estimates that combined insulation upgrades save around £455 per year on heating, while switching from an old gas boiler to a heat pump can add another £300 in annual savings on a typical bill. With a total yearly saving of about £755, the payback period is under three years. Over 25 years, assuming a 3% annual energy price rise, the total saving exceeds £25,000. You can check your property’s eligibility through the GOV.UK ECO4 page.
| Item | Figure |
|---|---|
| Upfront cost after grants | £2,000 |
| Yearly savings | £755 |
| Payback period | 2.6 years |
| 25-year lifetime savings | £25,300 |
What homeowners often get wrong
The most common mistake is assuming ECO4 covers the full cost of replacing your boiler with a heat pump without any contribution from you. Here are three frequent misunderstandings that can cost you money or disqualify your application.
- Believing all heating systems qualify ECO4 only funds heat pumps or biomass boilers in homes that already have a working central heating system. Installing a heat pump in a property with storage heaters alone often means you pay for new radiators and pipework yourself, which can add £3,000 to £5,000.
- Thinking the scheme covers repairs ECO4 is for energy-efficiency upgrades only, not fixing broken boilers or leaking pipes. If your boiler fails during the application process, you must repair it at your own cost before any funded work begins, otherwise the installer cannot proceed.
- Ignoring the EPC requirement Many assume any low-income home is eligible, but your property must have an EPC rating of D, E, F, or G. A home already rated C or above is excluded unless you are on specific benefits, and a wasted EPC assessment fee of around £120 is common among applicants who skip this check.
Quick reference
- ECO4 runs until March 2026 and is funded by the UK’s six largest energy suppliers under Ofgem rules.
- Insulation measures covered include loft, cavity wall, solid wall, floor, and room-in-roof insulation.
- Heating upgrades are limited to air source heat pumps, ground source heat pumps, and solar thermal panels.
- Eligibility requires either a household income below £31,000 or receipt of means-tested benefits like Universal Credit.
- All work must be installed by a TrustMark-registered firm certified under PAS 2030 or PAS 2035 standards.
Frequently Asked Questions
Yes, ECO4 covers replacing inefficient heating systems with low-carbon alternatives like heat pumps. It does not cover standard gas boiler replacements unless a heat pump is unsuitable, per Ofgem rules.
ECO4 covers loft, cavity wall, solid wall, floor, and room-in-roof insulation. The Energy Saving Trust states cavity wall insulation can save around £285 per year.
Yes, ECO4 runs until March 2026 according to GOV.UK. Applications must be submitted before the deadline to qualify for funding.
