Energy Companies Obligation
The Energy Companies Obligation (ECO) is a domestic energy efficiency programme to provide added support for packages of energy efficiency measures.
These measures can help with cutting down energy loss from a building and lead to less energy use. Support includes insulation and heating packages to low income and vulnerable households and insulation measures to low income communities.
Energy efficiency plays a key role in helping to lower energy bills. Following installation of most measures the difference will be immediate. Assuming that a consumer has been heating their home to an adequate level, they can continue doing so, but by using their heating less, resulting in significant bill reductions. Each house will require different measures for the optimum result, which is why it is important for the householder to work closely with their provider or installer to select best options.
ECO creates a legal obligation on energy suppliers to improve the energy efficiency of households through the establishment of three distinct targets:
- The Carbon Emissions Reduction Obligation (CERO) which focuses on hard-to-treat homes and, in particular, measures that cannot be fully funded through the Green Deal. Solid wall insulation and hard-to-treat cavity wall insulation are two examples. Other insulation measures and connections to district heating systems are also eligible if they are promoted as part of a package that includes solid wall insulation or hard-to-treat cavity wall insulation.
- The Carbon Saving Community Obligation (CSCO) which focuses on the provision of insulation measures and connections to district heating systems to domestic energy users that live within an area of low income. 15% of this target must be achieved by promoting measures to low income and vulnerable households living in rural areas.
- The Home Heating Cost Reduction Obligation (HHCRO) under which suppliers provide measures which improve the ability of low income and vulnerable households to affordably heat their homes.
There are lots of opportunities for customers to access energy efficiency improvements via the ECO. To find out more, contact your energy supplier.
Changes to ECO
The ECO is entering a period of change. The scheme is coming to an end in 2017, and starting from April 2017, will be replaced by a one-year transition scheme focusing on the fuel-poor. Key proposals include but are not limited to modifying the eligibility criteria to focus on the customers who need the measures the most and enabling Local Authorities to identify eligible customers.
Read more information on Energy Companies Obligation on Ofgem’s website.
How the savings are being passed on
The largest energy companies have all made commitments to reduce customer bills following the Government’s announcement of a restructure of the Energy Companies Obligation (ECO).
For more information see our table detailing the actions of each energy supplier and savings passed on (PDF 500KB).