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What is ECO4 Scheme: Qualifying Benefits, Application Process & Changes in 2024
- From: Kevin Smith
- Published 16 October 2024
The UK government has initiated the ECO4 scheme on 1st of April 2022. Those old heating systems that work on a huge running cost are replaced with an energy efficient one under the scheme.
Primarily, the aim is to put heating costs down to an affordable-level for low-income households. Basically, ECO stands for the “Energy Company Obligation”. While the digit 4 signifies that the scheme is currently in its fourth successive phase.
With the help of the ECO4 grants, the UK government aims to save energy and reduce greenhouse gas emission. Compared to its previous phase, ECO4 comes with new rules and eligible & non-eligible benefits. This guide will cover every detail. First, let’s briefly discuss its previous phases.
History of the ECO4 Scheme
Initially, the first phase, known as Energy Company Obligation (ECO) scheme, was introduced in 2013. This is for improving energy efficiency, and reducing carbon emissions, as well as lowering energy bills for families who can’t afford heating upgrades. So far, the scheme has covered three phases. Currently, it is in its fourth phase know as ECO4. Each phase has distinct goals to achieve certain milestones. Let’s take a quick snapshot of all its phases:
- ECO1 (2013-2015): Focused on insulation and heating measures, reducing around 7.34 million tons of carbon emissions.
- ECO2 (2015-2017): Continued with insulation but shifted towards supporting rural communities. It achieved about 9.87 million tons of carbon reduction.
- ECO2t (2017-2018): A transition phase that emphasised affordable warmth, achieving 1.54 million tons of carbon savings.
- ECO3 (2018-2022): Prioritised low-income households and introduced renewable energy measures, delivering 8.02 million tons of carbon reduction.
- ECO4 (2022-2026): Expands support for households on benefits and targets broader energy efficiency measures, aiming to reduce 3.1 million tons of carbon per year. ECO4 places more emphasis on long-term energy solutions like heat pumps and renewable technologies to meet the UK’s 2050 net-zero carbon goals.
Ultimate Objective of ECO4 Fundings
The main aim of the ECO4 scheme is to make a net zero carbon emission. By 2050, the UK government aspires to realise its environmental ambitions. Moreover, ECO4 aids poorer families to save money on their heating expenses.
With a budget of £3.9 billion, ECO4 focuses on making homes energy efficient. Insulating homes and upgrading boilers are top priorities. These improvements will help people spend less on heating. The government has set an ECO4 target for the energy suppliers to save £224.3 million of low-income household spendings in annual bills by March 2026.
What Does ECO4 Cover?
Under the ECO4 scheme, the government has helped install various energy efficiency measures. These include but are not limited to boiler replacement, air source heat pumps with free solar panels, insulation grants, and central heating grants. The scheme helps homes lose less heat, reducing the need for excessive heating. Below are some of the key measures:
- Insulation Grants: ECO4 provides grants for home insulations to prevent heat loss in winters. Free Government Grants mainly covers the cavity wall and loft insulation.
- Boiler Replacement Grant: Upgrading 15-year old non-condensing boilers to energy-efficient models. The grant will cover the cost of the new boiler and its installation.
- First Time Central Heating Grant: Those old homes that lack a centralised heating system like radiators, get a new central heating system. It includes a new condensing gas boiler, radiators for every living room, TRVs, smart thermostat, and all pipeworks.
- Free Air Source Heat Pumps with Solar PVs: ECO4 supports the installation of modern heating systems.
ECO3 vs ECO4: What’s Changed?
Compared to ECO3, ECO4 has a lot of amendments. Under ECO3, only homes with poor energy efficiency received free heating upgrades. ECO4, however, expands to cover more properties, including those needing major upgrades.
- Focus Low-income families: ECO4 focuses more on low-income households.
- Renewable Energy: ECO4 now places more emphasis on providing insulation and renewable energy.
- 2x Allowance for Energy Suppliers: Expect to get more funding because the allowances towards local authority flexible energy is doubled.
- Change in Eligible Benefits: Some eligible benefits of ECO3 are removed in the ECO4 benefits.
Advantage to Apply for the ECO4 Scheme
The ECO4 scheme brings several benefits to low-income households. The top three of them are:
- Reduced energy bills due to improved insulation and heating systems.
- A more comfortable home environment, especially during winter.
- Help with replacing inefficient boilers and upgrading to renewable energy.
The scheme no longer supports oil-fired boiler replacements. Instead, the focus of ECO4 is on greener technologies like heat pumps. This aligns with the government’s plan to shift reliance from fossil fuel to renewable energy.
EPC Rating Criteria to Apply for ECO4 Grants
An EPC rating indicates how energy efficient a home is. To qualify for ECO4, your home must have an EPC (Energy Performance Certificate) rating of below D, E, F, or G. Homes with a higher rating may not be eligible. The goal is to help those homes that need the most improvement.
ECO4 Eligibility Criteria
The ECO4 scheme is open only for low-income households. You must be receiving certain benefits to apply. Your home must also meet the EPC rating criteria to qualify for upgrades.
ECO4 Eligibility Qualifying Benefits
Here is a list of benefits for the ECO4 scheme eligibility:
- Income-based Jobseeker’s Allowance
- Income-related Employment & Support Allowance
- Income Support Allowance
- Pension Credit Saving Credit
- Pension Credit Guarantee Credit
- Universal Credit
- Working Tax Credit
- Child Tax Credit
Do you or any of your household receive any of these benefits?
Child Benefits Income Limit for the Year 2024-2025
For households claiming only Child Benefit, there are specific income limits in place for ECO4. If your annual income is under £21,000, you may still qualify for the scheme. These limits are adjusted yearly to help more families benefit.
No of Children | Single Parent | Couple |
1 | £19,900 | £27,500 |
2 | £24,800 | £32,300 |
3 | £29,600 | £37,200 |
4 | £34,500 | £42,000 |
ECO4 Changes in 2024
In 2024, ECO4 saw important updates. The scheme now focuses more on sustainable energy solutions. Heat pumps and solar panels are being promoted over traditional heating systems. The percentage of Local Authority Flexible Energy (ECO4 Flex) measures has also increased, making more households eligible now.
ECO4 Halfway Achievements
As of 2024, ECO4 has reached several milestones. The scheme has improved over 120,000 homes. More families are now saving on energy bills. An increase in Local Authority Flex measures has allowed more people to benefit. ECO4 is well on its way to meeting its targets by 2026.
Is the Great British Insulation Scheme and ECO4 the Same?
No, the Great British Insulation Scheme (GBIS) is different from ECO4. While both focus on energy efficiency, they target different groups. ECO4 is for low-income households, while the GBIS aims to help a broader range of people. Both work towards reducing carbon emissions.
How to Apply for ECO4
As of 2024, ECO4 has reached several milestones. The scheme has improved over 120,000 homes. More families are now saving on energy bills. An increase in Local Authority Flex measures has allowed more people to benefit. ECO4 is well on its way to meeting its targets by 2026.
Frequently Asked Questions for Homeowners and Landlords
- Can landlords apply? No, basically eligible tenants can do so with landlord permission.
- Is there a cost for applying? No, applying for ECO4 is free.
- Can second homes apply? No, only primary residences are eligible for ECO4.
Future of ECO4
The future of ECO4 looks promising. The scheme will continue to help low-income households until 2026. The government may introduce new energy-saving technologies as part of future updates. ECO4 is key to helping the UK reach its carbon reduction goals.
Take a Step Towards Energy-efficient Home with the Help of ECO4
The ECO4 scheme offers a great opportunity to make your home more energy-efficient for free. It reduces bills, increases comfort, and helps the environment. If you’re eligible, don’t miss the chance to upgrade your home. Apply today and start saving on your energy bills.
Conclusion
The grants under the ECO4 help families on benefits save money on energy and improve their home efficiency. ECO4 offers various benefits, whether you desire insulation, heating upgrades, or renewable energy solutions. If you fit the qualifying requirements, don’t miss this chance to upgrade your house and lessen your carbon impact. Apply now to begin living more comfortably and reducing your energy expenses.
Frequently Asked Questions
Low-income households receiving qualifying benefits, such as Universal Credit or Pension Credit, can apply for ECO4.
Yes, through ECO4 Flex, Local Authorities may offer support even if you’re not on qualifying benefits.
ECO4 covers insulation (loft, wall, underfloor), heating upgrades, and renewable energy solutions like heat pumps.
No, homes with an EPC rating above D are generally not eligible for ECO4 support.
You can apply through your heating system installer like us to begin the application process. First check your eligibility and then our representative will contact you for assistance.
