The Energy Company Obligation (ECO4) was supposed to be the government’s flagship programme for cutting household energy bills and carbon emissions. Yet the National Audit Office (NAO) has found that installations of insulation, heat pumps, and other measures are running at roughly half the planned rate. For the UK homeowner struggling with a cold draughty house and a £2,500+ annual energy bill, that shortfall is not an abstract statistic, it is a missed opportunity to reduce costs and improve comfort.
As reported by the National Audit Office, the Department for Energy Security and Net Zero (DESNZ) set a target of 70,000 installations per year under ECO4. In the first year, only 34,000 were completed. That is a 51% delivery rate. The reasons are familiar to anyone who has tried to get a heat pump quote in the last 18 months: a shortage of trained installers, complex eligibility criteria, and a scheme design that relies on energy suppliers, not the government, to deliver the work.
Who qualifies, and who doesn’t
ECO4 is aimed at low-income and vulnerable households, typically those receiving means-tested benefits or living in fuel poverty. The logic is sound: the people who need help most are those least able to pay for upgrades themselves. But the eligibility rules are labyrinthine. To qualify, a household must have an EPC rating of D, E, F, or G and meet specific benefit criteria. Then the energy supplier must agree to fund the work, and suppliers have been slow to sign off projects.
Ofgem, which administers the scheme, has acknowledged the bottlenecks. In a statement to the NAO, it said it was working with suppliers to simplify the process. But for the homeowner on the ground, the experience is often one of frustration: waiting weeks for a survey, then months for an installation date, if it comes at all. The NAO report notes that some suppliers have stopped taking new applications because their allocated funding has run out.
What it costs a typical 3-bed semi
For a household that does qualify, the savings can be substantial. A typical semi-detached house with loft and cavity wall insulation could save around £300 a year on heating bills, according to Energy Saving Trust estimates. An air source heat pump, if installed correctly in a well-insulated home, can cut running costs by 20-30% compared to an old gas boiler. But the upfront cost of a heat pump installation is typically £7,000 to £13,000, and ECO4 covers most or all of that for eligible households.
The catch is that the scheme is not reaching enough people. The NAO estimates that at the current rate, it will take until 2030 to meet the original target of 450,000 installations by 2026. That is a six-year delay. For the homeowner who needs a new boiler or better insulation now, the wait is not an option.
What this misses, and what you can do
The NAO report is a damning indictment of the government’s delivery model. But it also points to a deeper problem: the UK’s reliance on energy suppliers to administer social programmes. Suppliers are commercial entities; their primary duty is to shareholders, not to fuel-poor households. The result is a scheme that is under-resourced, poorly marketed, and slow to adapt.
Yet for homeowners who are eligible, ECO4 remains one of the best deals available. The key is to act early, before supplier budgets run out. Check your eligibility on the gov.uk website or through the Simple Energy Advice service. Gather your EPC certificate, benefit letters, and proof of income. Then contact your energy supplier directly, or a registered installer who works with multiple suppliers. The process is bureaucratic, but the payoff is a warmer, cheaper home.
Households on standard variable tariffs can apply through their supplier from today. Eligibility closes when the scheme ends in March 2026. Do not wait for the government to fix the system, the system will not fix itself.
Frequently Asked Questions
Under ECO4, an air source heat pump installation typically costs between £7,000 and £13,000 upfront, but eligible low-income households can get most or all of that covered by the scheme. The Energy Saving Trust estimates it can cut running costs by 20-30% compared to an old gas boiler if installed in a well-insulated home.
ECO4 is aimed at low-income and vulnerable households, typically those receiving means-tested benefits or living in fuel poverty. You must have an EPC rating of D, E, F, or G and meet specific benefit criteria, but many homeowners face delays as energy suppliers have been slow to sign off projects.
The National Audit Office found installations are running at roughly half the planned rate, with only 34,000 completed in the first year against a target of 70,000. Reasons include a shortage of trained installers, complex eligibility rules, and suppliers stopping new applications when their allocated funding runs out.
A typical semi-detached house with loft and cavity wall insulation could save around £300 a year on heating bills, according to Energy Saving Trust estimates. With annual energy bills over £2,500 for many UK homeowners, this can make a significant difference to household finances.
If you don't qualify for ECO4 due to eligibility criteria or supplier funding running out, you can explore the Boiler Upgrade Scheme in England and Wales, which offers £7,500 towards heat pump installations. For insulation, local council grants or the Great British Insulation Scheme may provide support, though availability varies by area.
