ECO3 Innovation

Guidance

Publication date

Industry sector

Supply and Retail Market

Scheme name

ECO

Under ECO3, energy suppliers can deliver up to 10% of their obligation by installing innovative measures in eligible households. There are two innovation routes under the scheme:

  • Demonstration actions – measures that have previously been tested in a laboratory setting and now require testing at scale in a live environment, or are marketable products that are being sold and may need additional support.
  • Innovation measures – a measure that is different from those previously delivered under supplier energy efficiency obligations by having, for example, an improved material that can demonstrate improved energy efficiency performance, or an improved installation technique.

These routes are optional to obligated suppliers. However, to encourage participation, and to deliver new and improved measures into the scheme, a Lifetime Bill Saving score (for demonstration actions) or a deemed score uplift (for innovation measures) will be awarded to measures that are delivered under these routes.

In addition to innovation, suppliers can use the monitored measures route to deliver up to 10% of their obligation. This is also voluntary and is intended to allow suppliers the opportunity to use modern monitoring technology to measure the actual energy efficiency performance of homes that have received energy efficiency measures over time. Suppliers who use the monitored measures route will receive a score uplift if the measures that are being monitored are proven to deliver more savings than that assumed by the standard deemed score.

We have written guidance to assist interested parties in delivering measures under these three routes. This can be found below, alongside their respective application forms. Approved innovation measure descriptions and monitored measure scoring methodologies are also published below.

ECO3 Approved Demonstration Actions

We have also published the independent and summary reports for demonstration actions that have been completed and approved under ECO3. These reports contain information and results from the demonstration actions trials, as well as analysis of the findings, and a summary of the project costs. The current list of approved demonstration actions includes:

  • AirEx smart ventilation control

Please note that only obligated suppliers can submit an innovation application to Ofgem.

A technical advisory panel (TAP) has been set up to review applications and make recommendations to Ofgem to approve or reject applications. Minutes of TAP meetings are also published here. The TAP meeting dates for 2019/20/21 are as follows:

  • 3 April 2019 - Minutes available
  • 15 and 31 July 2019 - Minutes available
  • 7 and 17 October 2019 - Minutes available
  • 13 January 2020 - Minutes available
  • 10 March 2020 - Minutes available
  • 12 May 2020 - Minutes available
  • 14 July 2020 - Minutes available
  • 8 September 2020 - Minutes available
  • 11 November 2020 (additional meeting) - Minutes available
  • 24 November 2020 - Minutes available
  • 16 March 2021 - Minutes available 
  • 19 August 2021 - Submission deadline 7 July 2021
  • 11 November 2021 - Submission deadline 30 September 2021
  • 10 March 2022 - Submission deadline 27 January 2022

Please note that the submission deadlines for the remaining TAP meetings have been extended from 20 working dates in advance of the TAP meeting to 30 working days. This extension is intended to allow suppliers more time to address any initial clarifications and reduce the number of clarifications required following the TAP meeting.

Measures put forward under the innovation routes must be materially different from measures that have already been delivered under the scheme, so interested parties should consult our public reports to understand what has already been installed under ECO. They should also assess whether it is the most suitable route to deliver the new or improved measure under the scheme. Suppliers can still make an alternative methodology application to apply for a new scoring methodology. We recommend that interested parties consult the decision tree below to determine what type of application may be suitable for the measures in question.

Whilst the measures set out in any report or published on our website had been assessed by Ofgem as having been compliant with the requirements of the ECO3 Order, approval of an application does not represent:

a) that any materials, equipment or methods used are compliant with the applicable:

(i) current version of PAS 2030 at the time of installation,

(ii) health and safety standards,

(iii) insulation industry standards, or

(iv) Building Regulations (as applicable from time to time in England & Wales or Scotland),

b) any warranty or guarantee in relation to safety or aftercare arrangements,

c) verification of methods used during trials, or the accuracy of any results obtained from these methods, or

d) any product endorsement or approval for installation in any energy efficiency or environmental scheme.

It is the responsibility of suppliers to ensure that the above matters are fully complied with as required.

Notes: any reference to a report includes any independent report commissioned for the purposes of sponsoring an ECO measure under part 5 of the ECO3 Order. For further guidance on safety and aftercare, refer to section 8 of the Ofgem ECO3 Guidance Innovation.

ECO3 Guidance: Innovation updated February 2020

Version 1.1 of this guidance includes clarifications and updates to the previous version, as well as changes resulting from the ECO3 (Amendment) Order. Details of changes can be found in the summary of updates to the guidance document below.

As part of this update, we have also published a tool to help determine sample size for the performance monitoring of demonstration actions. This tool has been developed by the TAP to assist with the assessment of applications. It is intended as a guide only, and does not consider all of the factors which can influence required sample size. Suitable justification of sample size should be provided in the application.

Draft guidance for notifying demonstration actions published July 2020

In addition to the ECO3 Guidance: Innovation, we have published guidance on notification requirements for completed demonstration actions. This guidance is aimed at suppliers who are delivering, or aim to deliver, a demonstration action. Its primary aim is to provide information on what is required to notify a completed demonstration action, with specific guidance for each part of the notification ‘pack’.

As part of this guidance, we have also published a document containing templates to be completed and submitted as part of the notification of a demonstration action. These should be used in conjunction with the ECO3 Guidance: Notification of demonstration actions.

ECO3 Guidance: Notification of Demonstration Actions updated July 2021

Version 1.1 of this document has been updated to add more detail in some areas. The notification templates have also been updated to version 1.1, and should be used in conjunction with the ECO3 Guidance: Notification of demonstration actions.

For a detailed list of the changes made, please refer to the ‘Summary of updates to the ECO3 Guidance: Notification of Demonstration Actions v1.1’.