ECO4

How ECO4 Works

The ECO4 scheme, which officially commenced in July 2022 and is set to run till March 2026, represents a continuation and enhancement of its predecessors, building on the success of previous phases. It mandates that medium and large energy suppliers fund the installation of energy efficiency measures in households that qualify, targeting areas of significant need and striving for a substantial reduction in the carbon footprint of residential buildings.

This latest phase comes with an increased budget and a refined focus on deeper, more comprehensive retrofits. It signals a noticeable shift in the government's approach, emphasizing long-term, impactful solutions over short-term fixes.

Eligibility and Application

Eligibility for the ECO4 scheme is determined based on several factors, including household income, benefits received, and the energy efficiency of the property. The main qualifying factor is benefits received, without this a potential client may be able to go down an alternative route such as LA Flex, HUG's (if off mains gas network) or LADS for example.

Qualifying benefits are :

Income-based Jobseekers Allowance (JSA)

• Income Support (IS)

• Income-related Employment & Support Allowance (ESA)

• Credit Working Tax Credit (WTC)

• Pension Credit Savings Credit

• Pension Credit Guarantee

• Universal Credit (UC)

• Housing Benefit

• Child Tax Credits (CTC)
  
  Priority is given to those in fuel poverty, on low incomes living in energy inefficient homes, and particularly vulnerable groups.
  
  

The initial assessment will consider the household's current energy efficiency and identify the most beneficial upgrades, tailoring the support to each specific situation.

What Can Be Installed

The range of installations under ECO4 has been broadened to include a variety of measures aimed at reducing energy consumption and enhancing living conditions. These include, but are not limited to, loft and wall insulation, double glazing, energy-efficient heating systems, and renewable energy technologies such as solar panels and heat pumps.

For the first time, the scheme also puts an emphasis on 'fabric first' measures, addressing the building's fundamental elements to maximise energy efficiency and minimise heat loss.

Restrictions and Challenges

However, the scheme comes with its set of restrictions and challenges. Not all households will qualify for all types of installations, as eligibility for specific measures depends on the existing condition of the property and the potential for energy savings. Additionally, the onus is on the energy suppliers to deliver these upgrades, which has raised concerns about the scheme's capacity to meet its ambitious targets, especially given the scale of work required in some properties.

Impact on UK Residential Landlords

For residential landlords in the UK, the ECO4 scheme heralds a mix of opportunities and obligations. Landlords with properties that fall under the E, F or G Energy Performance Certificate (EPC) ratings are particularly encouraged to take advantage of the scheme to improve their properties' energy efficiency.

Not only does this enhance the desirability and value of their rental properties, but it also aligns with the upcoming regulations requiring rental properties to meet minimum energy efficiency standards.

However, landlords must navigate the scheme's intricacies, ensuring they qualify for the support and understanding the extent of the improvements permissible. There is also the broader context of tightening regulations around energy efficiency in rental properties, with the government signalling its intention to raise the minimum EPC requirement in the coming years.

As such, engaging with the ECO4 scheme can be seen as a proactive step for landlords to future-proof their properties against increasing regulatory demands.

Conclusion

The ECO4 scheme represents a critical component of the UK's strategy to address fuel poverty, reduce carbon emissions, and improve the energy efficiency of its housing stock. By targeting assistance to those in greatest need, it promises not only to lower energy bills for vulnerable households but also to contribute to the broader environmental goals.

For homeowners and landlords alike, ECO4 offers substantial benefits, but it also necessitates close attention to eligibility criteria and regulatory frameworks.