Energy Company Obligation (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.

On Thursday 23 January 2025 the Department for Energy Security and Net Zero issued a statement about potential issues with ECO and GBIS installations.

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.

Roles

Government's role

The Department for Energy Security and Net Zero set ECO4 policy and legislation.

Ofgem's role

We administer ECO4 on behalf of DESNZ. Our duties include:

• Calculating energy suppliers’ obligations and tracking performance against them
• processing supplier and delivery partner notifications of completed retrofits
• auditing suppliers and their notifications to minimise non-compliance
• evaluating and agreeing the outcomes of counter fraud investigations that suppliers have undertaken and progressing counter fraud activity where allegations of fraud have been made
• reporting on scheme progress to the Secretary of State of DESNZ

TrustMark's role

The quality assurance of retrofits to both technical and consumer protection standards is overseen by TrustMark, our ECO delivery partner and the government endorsed quality scheme for domestic retrofits. We use data shared by TrustMark to check compliance against scheme rules.

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.