What is ECO?
The Energy Company Obligation (ECO) is a government energy efficiency scheme in Great Britain to help reduce carbon emissions and tackle fuel poverty.
Under the scheme, larger energy suppliers have to deliver energy efficiency measures to homes in Great Britain.
Suppliers are given targets based on their share of the domestic gas and electricity market.
The scheme focuses on the installation of insulation and heating measures and supports vulnerable consumer groups.
What are the main obligations?
1. Carbon Emissions Reduction Obligation (CERO)Under CERO, obligated suppliers must promote ‘primary measures’, including roof and wall insulation and connections to district heating systems.
2. Carbon Saving Community Obligation (CSCO)Under CSCO, obligated suppliers must promote insulation measures and connections to district heating systems in areas of low income. The CSCO target has a sub-obligation which states that at least 15% of a supplier’s CSCO must be achieved by promoting measures to low income and vulnerable households in rural areas or deprived rural areas.
3. Home Heating Cost Reduction Obligation (HHCRO)Under HHCRO, obligated suppliers must promote measures which improve the ability of low income and vulnerable households (the ‘affordable warmth group’) to heat their homes. This includes actions that result in heating savings, such as the replacement or repair of a boiler.
Find out more in the support for improving your home section of our website.
Progress towards meeting obligations
We publish monthly reports which give an overview of energy suppliers’ progress towards meeting their targets.
Our role in ECO
Ofgem E-Serve administers the scheme on behalf of the Department for Energy, Business & Industrial Strategy. 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.
The first phase of ECO, known as ECO1, ran from from January 2013 to March 2015. You can read our final report on ECO1 online.
The current obligation period, known as ECO2, launched on 1 April 2015. It will run for two years until 31 March 2017.
In November 2015, the government announced that from April 2017 the scheme will be replaced with a new supplier obligation to reduce carbon emissions and focus on the fuel poor. This will run for five years.
Contacting the ECO team
Still got a question? Contact the ECO team, who’ll be happy to help.