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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 two distinct targets:
  • The Carbon Emissions Reduction Obligation (CERO) which focuses on the promotion of hard-to-treat homes. 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. Some CERO must also be delivered in rural areas.
  • The Home Heating Cost Reduction Obligation (HHCRO) which focuses on the promotion of measures which improve the ability of low income and vulnerable household to heat their homes. This includes actions that result in heating savings, such as the replacement or repair of a boiler.
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 most recent ECO scheme (ECO2t) commenced on 1 April 2017 and is an eighteen-month obligation that will run until 30 September 2018. The Government are due to consult on a new scheme to replace ECO2t in the near future (early 2018). Energy UK is working closely with members and Government to learn any lessons from the current scheme and to ensure that the future scheme will be fit for purpose.

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).

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