Last edited 13 Sep 2021

Energy companies obligation ECO

On 4 December 2012 Parliament passed the Electricity and Gas (Energy Companies Obligation) Order 2012. The energy companies obligation (ECO) then came into effect in January 2013. It ran until March 2015 when a new obligation period (ECO2) was introduced, running from 1 April 2015 to 31 March 2017 and extending the lifetime of the original scheme.

The energy companies obligation replaced the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP), which ended on 31 December 2012.

The energy companies obligation provides support for the installation of energy efficiency measures to reduce energy consumption in the UK and to help people living in fuel poverty and in properties that are hard to treat. This is part of the UK government’s strategy to achieve its legally binding commitment to cut emissions of greenhouse gasses by at least 34% by 2020 and by 80% by 2050 compared with 1990 levels. This commitment is set out in the Climate Change Act.

The energy companies obligation includes:

The ECO is worth approximately £1.3 billion a year and is funded by the big six energy suppliers. It is intended to run alongside the green deal and can be provided directly to customers, or through pre-approved arrangements, such as green deal providers.

ECO is administered and monitored by the Office for Gas and Electricity Markets (Ofgem). Energy suppliers report on delivery against their obligation, to demonstrate that they will meet their target by 2015.

The Energy Saving Advice Service offers advice about the help consumers may be able to get.

NB On 14 April 2016, the National Audit Office (NAO) published Green Deal and Energy Company Obligation, in which it found that the design of the ECO to support the Green Deal added to energy supplierscosts of meeting their obligations. This reduced the value for money of the ECO, but it was not able to determine by how much.

In January 2017, it as announced that the scheme would be extended to September 2018 and that there would an increased focus on low income and vulnerable homes. The new measures, which were introduced on 1 April 2017 included:

Consumer Minister, Margot James said: “The big energy firms already have to help households save gas and electricity bills, by improving homes so they are easier and cheaper to keep warm. We’re strengthening this obligation today and making sure they prioritise low income households as part of our plan to insulate 1 million homes by 2020.”


It was confirmed that around 2.2 million measures were installed in around 1.7 million properties between 2013 and the end of January 2017.

On 30 March 2018, the government launched a consultation into the scheme, which was due to end in September 2018. Proposals include; focussing the scheme entirely on low income households, and allowing suppliers to allocate up to 20% of their delivery target to supporting innovative measures. For more information see: Energy Company Obligation consultation.

In July 2018 the Government confirmed that the third ECO scheme (ECO3) would be a 100% Affordable Warmth scheme. The Electricity and Gas (Energy Company Obligation) Order 2018 (“the ECO Order”) brings into force ECO3, which supports low income, vulnerable and fuel poor households meaning that all measures should be delivered to these groups. The scheme will run until 31 March 2022.

[edit] Related articles on Designing Buildings Wiki

[edit] External references

Designing Buildings Anywhere

Get the Firefox add-on to access 20,000 definitions direct from any website

Find out more Accept cookies and
don't show me this again