Energy Company Obligation (ECO)

About ECO

The Energy Company Obligation (ECO) is a government energy efficiency scheme in Great Britain designed to tackle fuel poverty and help reduce carbon emissions.

The scheme has seen 4 iterations, ECO, ECO1, ECO2 and ECO3, a brief overview can be found at the bottom of this page. The ECO3 scheme closed on 31 March 2022 and the ECO4 Order came into force in July 2022. ECO4 applies to measures installed from 1 April 2022 and will cover a four-year period until 31 March 2026.

How does ECO work?

The ECO scheme works by placing a Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers. Under HHCRO, obligated suppliers must promote measures that improve the ability of low-income, fuel-poor and vulnerable households to heat their homes. This includes actions that result in reduced energy usage, such as installing insulation or upgrading a heating system. The overall target for these measures is divided between suppliers based on their relative share of the domestic gas and electricity market.

Who is the scheme for?

The ECO scheme supports energy efficiency measures in the home of those considered to be in fuel poverty, if you’re a homeowner or tenant you can find out more in the homeowners and tenants section

Also see our dedicated pages if you are an energy supplier, part of the supply chain or a local authority.

All guidance documents are available in the Contacts, guidance and resources section.

Ofgem’s role

Ofgem has been appointed the scheme administrator on behalf of the Department for Business, Energy & Industrial Strategy (BEIS). Our duties include:

  • allocating a proportion of targets to obligated suppliers
  • monitoring supplier progress and deciding whether they’ve achieved their obligations
  • reporting to the Secretary of State
  • auditing, ensuring compliance and preventing and detecting fraud

How are Energy Suppliers performing against their targets?

To view how energy suppliers are progressing towards meeting their targets for this obligation, we publish monthly reports.

ECO scheme history