The Energy Company Obligation (ECO) is an energy efficiency programme that was introduced into Great Britain at the beginning of 2013. The ECO scheme replaced two previous schemes, the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). The new obligation period (ECO2) runs from 1 April 2015 to 31 March 2017, extending the lifetime of the original ECO scheme, the first phase of which ended on 31 March 2015.
ECO places legal obligations on larger energy suppliers to deliver energy efficiency measures to domestic premises. Under ECO, obligated suppliers must deliver energy efficiency measures to their domestic customers. This is achieved through three distinct obligations:
- Carbon Emissions Reduction Obligation
Under the Carbon Emissions Reduction Obligation, obligated suppliers must promote ‘primary measures’, including roof and wall insulation and connections to district heating systems. Other ‘secondary measures’, which improve the insulating properties of a premises can also be installed at the same premises as primary measures.
- Carbon Saving Community Obligation
Under the Carbon Saving Community Obligation, 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 requires 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.
Home Heating Cost Reduction Obligation
Under the Home Heating Cost Reduction Obligation, 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.