Responding to Guardian story about potential cuts to energy efficiency funding Energy UK’s chief executive, Dhara Vyas said:
“Investing in clean power will result in lower, more stable bills in the 2030s. The Government has other options available to make bills more affordable for customers today – from targeting help and support to those who need it most, to taking action to rebalance policy costs.
“Billions of pounds of investment have been on hold while we await the Warm Homes Plan – all of which could be jeopardised by any sudden change of direction. So hijacking the Plan’s budget and effectively abandoning its original purpose would be a short-sighted and disastrous move.
“A fully funded Warm Homes Plan will play a transformative role in ensuring millions more people live in warmth and comfort, while also cutting bills permanently and supporting customers to make the switch to more efficient and clean technologies like heat pumps and heat networks.
“We’ve had ample previous experience showing how kneejerk cuts to investment in warmer homes have resulted in customers paying billions of pounds more on their energy bills, damaging supply chains and businesses, with knock on impacts to investment and job losses. The Government must not repeat the same mistake.”
ENDS
Energy Company Obligation (ECO) Benefits
- At over 10 years old ECO is the longest running fuel poverty scheme in Great Britain.
- ECO has upgraded over 2.6 million UK homes with 4.3 million energy-saving measures up to the end of ECO3, making the largest and most successful government energy efficiency scheme to date.
- ECO has generated lifetime carbon savings amounting to 58.2 MtCO2e up to the end of ECO3, equal to carbon absorbed by 264 million mature trees over 10 years.
- The total estimated annual bill savings from measures installed under the ECO4 obligation are £138.5 million.
- Ofgem described ECO as ‘the main legislative driver for retrofitting homes’ in Great Britain.
- The UK energy efficiency market is worth £15 billion, and supports 82,000 jobs.
- 29,763 renewable energy systems have been fitted under ECO4 so far. 933,219 measures have been installed under ECO4 in total in over 162,472 households.
- Between January 2018 (when records began) and June 2025, almost a quarter (23.25%) of heat pumps installed under government supported schemes where installed under ECO.
- There were almost 60,000 certified heat pump installations in 2024, lagging behind the Climate Change Committee’s Balanced Pathway trajectory of 450,000 installed annually by 2030 and the Government target of 600,000 by 2028. 17,219 heat pumps were installed under ECO last year, making up almost a third of all heat pump installations.
- In 2021, poor housing quality cost the NHS £1.4 billion, and wider society £18.5 billion.
- ECO is helping to build capacity and resource for retrofit delivery within local authorities. Twenty per cent of ECO measures installed since 2022 have been in households identified by local authorities as in need of support.
Carbon Brief analysis showed scrapping previous green policies has added £22 billion to people’s energy bills.
Impact of a two-year hiatus
- £4bn of investment in energy efficiency measures could be lost.
- As ECO is the backbone of the energy efficiency supply chain, a two-year hiatus would cause serious damage to it, limiting the government’s ability to meet its target of ensuring that all fuel-poor homes should be at least band C by 2030, and as many homes as possible are EPC Band C by 2035. An Installation Assurance Authority Federation member survey found that:
- 89% of respondents said that guaranteed funding under the Warm Homes Plan would encourage them to scale up their organisation.
- 88% of respondents said that they have 6 months or less of cash reserves.
- 91% of respondents said that there would be jobs at risk if the ECO extension is delayed.
- From September 2024-August 2025 (most recent figures), 278,278 ECO measures have been installed in 58,150 households. If installation were to continue at the same rate over the next two years, 556,556 measures in 116,300 households would be missed out on.
- Currently, there is only around a third of the 70,000 workers needed by 2035 to achieve the balanced pathway (Heat Pump Association). Increasing risk for the supply chain will hamper the industry’s ability to attract new entrants into the sector.
- Businesses need long-term certainty on the longevity of schemes to invest in materials and people. It can take up to four years to train specialists in some construction trades, for example.
- Lack of clarity led to significant delivery drop offs in previous scheme transitions.
- The average delivery in quarter 2 2022 (just before the beginning of ECO4) was around 10,500 measures per month, a fall from the final quarter of ECO3 where an average of 30,200 measures were delivered per month.
- ECO4 started delivery in July 2022. 1,484 ECO measures were delivered that month, the lowest amount for any month on record.
Supporting figures
- 30.7m domestic and 1.75m non-domestic buildings in the UK (England, Wales, Scotland, NI). Buildings account for 25% of emissions reduction under CB7.
- CCC cites heat pump rollout as one of the “biggest risks” for emissions reduction.
- Heat pump installations must rise to 450,000 per year by 2030 and 1.5m by 2035 under CB7s balanced pathway.