The Energy Company Obligation (ECO4) is the fourth phase of the UK government’s scheme to help low-income and vulnerable households improve energy efficiency, with a total funding pot of £4 billion (GOV.UK, 2026). ECO4 stands for Energy Company Obligation 4, a mandated programme requiring larger energy suppliers to fund insulation, heating upgrades, and renewable measures for eligible homes.
Whether you qualify depends on your household income, property type, and existing energy performance. The scheme runs until March 2026 and targets homes with an Energy Performance Certificate (EPC) rating of D, E, F, or G. It does not cover general maintenance or boiler repairs, only specific measures listed in the government’s approved framework.
Eligibility criteria for ECO4 funding
ECO4 is available to owner-occupiers and private tenants (with landlord consent) receiving certain means-tested benefits. These include Universal Credit, Pension Credit, Income Support, and Child Tax Credit among others (Ofgem, 2026). If you do not claim these benefits, you may still qualify via the LA Flex route, where your local authority can refer households in fuel poverty or with a low income. Your property must also have an EPC rating below C.
Measures covered under ECO4
The scheme funds a wide range of energy-saving improvements. Typical installations include loft insulation, cavity wall insulation, solid wall insulation, and underfloor insulation. Heating upgrades cover air source heat pumps, ground source heat pumps, and solar thermal panels. For off-gas grid homes, electric storage heaters or biomass boilers may be approved (Energy Saving Trust, 2026). All work must be carried out by TrustMark-registered installers to ensure quality and compliance.
How ECO4 differs from ECO3
ECO4 replaced ECO3 in July 2022 and introduced stricter minimum energy efficiency standards. Under ECO4, a whole-house approach is required, meaning multiple measures must be installed together to achieve a minimum improvement of two EPC bands (GOV.UK, 2026). This contrasts with ECO3, where single measures could be installed. ECO4 also extends eligibility to more households through the LA Flex scheme and removes the previous minimum cost threshold for individual measures. The scheme’s total budget is £4 billion, compared to ECO3’s £3.8 billion.
A worked example
A typical 1930s semi-detached home in Manchester with an EPC rating of E could see total upgrade costs of £14,000 before grants. After the £7,500 BUS grant for an air source heat pump and full ECO4 funding for cavity wall and loft insulation, the upfront cost drops to roughly £1,500. The Energy Saving Trust estimates this home would save £420 per year on heating bills, meaning the payback period is under four years. Over 25 years the total savings reach £10,500, even accounting for maintenance on the heat pump. The 0% VAT on energy-saving materials until March 2027 adds another £300 in savings. This household qualifies under the LA Flex route because their combined income is £22,000 and the council has identified them as being in fuel poverty. The installer must be MCS-certified to get the BUS grant and ECO4 funding.
| Item | Figure |
|---|---|
| Upfront cost after grants | £1,500 |
| Yearly savings | £420 |
| Payback period | 3.6 years |
| 25-year lifetime savings | £10,500 |
What homeowners often get wrong
The biggest mistake homeowners make is assuming ECO4 covers boiler repairs or full replacements when it only funds specific heating upgrades like heat pumps or solar thermal. Here are three common errors to avoid.
- Thinking ECO4 covers all insulation types Many believe ECO4 will pay for any insulation measure. The scheme only funds cavity wall, loft, and solid wall insulation that meets minimum thickness and performance standards. Installing the wrong type can void your warranty and waste thousands of pounds.
- Believing you must be on benefits to qualify A common misconception is that only benefit claimants can access ECO4. The LA Flex route allows local authorities to refer households in fuel poverty or with a low income, even if they receive no benefits. Missing this could mean losing out on £10,000 in funding.
- Assuming the installer handles all paperwork Many think the installer manages the grant application. You must provide proof of income, EPC certificate, and landlord consent (if renting). Failing to supply these documents can delay or cancel the project and leave you with the full bill.
Quick reference
- ECO4 stands for Energy Company Obligation 4, a £4 billion government scheme running until March 2026.
- Eligible homes must have an EPC rating of D, E, F, or G and be occupied by low-income or vulnerable households.
- You can qualify via means-tested benefits or through your local authority’s LA Flex route if you are in fuel poverty.
- The scheme covers cavity wall, loft, and solid wall insulation plus heating upgrades like heat pumps and solar thermal.
- ECO4 does not cover boiler repairs, general maintenance, or measures not listed in the approved government framework.
Frequently Asked Questions
ECO4 stands for Energy Company Obligation 4, a government scheme requiring larger energy suppliers to fund efficiency upgrades. Ofgem states it targets low-income and vulnerable households.
You qualify if you receive means-tested benefits like Universal Credit or Pension Credit, or via the LA Flex route. Your property must also have an EPC rating below C, according to GOV.UK.
ECO4 covers insulation (loft, cavity, solid wall), heating upgrades like air source heat pumps, and renewable measures. It does not cover boiler repairs or general maintenance, per the government's approved framework.
