The Energy Company Obligation (ECO) is a government scheme to obligate larger suppliers to deliver energy efficiency measures to domestic premises in Britain.
The new obligation period, known as ECO2, launched on 1 April 2015. It will run for the next two years to 31 March 2017. It extends the original lifetime of the scheme which ended on 31 March 2015.
Suppliers are allocated a proportion of the overall ECO targets, depending on their relative share of the domestic gas and electricity market. Suppliers achieve their obligations by delivering energy efficiency measures at domestic premises. ECO has three 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.
ECO replaces two previous schemes, the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). You can find out more about them in our section on previous energy efficiency schemes.