Government ECO Scheme

The Government ECO Scheme Explained: What It Is, How It Works, and Who Qualifies in 2026

The government ECO scheme — formally called the Energy Company Obligation — is a legal requirement placed on large UK energy suppliers to fund free energy efficiency improvements in eligible lower-income and fuel-poor homes. It has run continuously since 2013, through four successive phases, and its current version, ECO4, runs until 31 December 2026. It is not funded by taxpayers. The money comes from obligated energy suppliers, who recover the cost across their wider customer base.

Please note: InstantGrant is an independent grant information and application-support service. We are not the UK government, Ofgem, or any energy supplier. We do not administer the ECO scheme or determine eligibility. All information on this page is verified against Ofgem, GOV.UK, and DESNZ guidance as of August 2026. Always confirm current eligibility and scheme status directly with your energy supplier, local council, or the official Ofgem ECO guidance pages before proceeding.

If you have been searching "government ECO scheme" because a neighbour mentioned it, a leaflet came through your door, or you saw something on social media, this guide explains exactly what it is, which version is currently open, who it covers, and what is coming after it closes.

What the ECO Scheme Is and Is Not

The Energy Company Obligation is one of the UK's main tools for improving the energy performance of the existing housing stock. The government sets targets and rules. Ofgem enforces them. Large energy suppliers — British Gas, E.ON Next, EDF, OVO, Octopus Energy, ScottishPower, Shell Energy, and others — fund the actual work, delivered through approved installer networks.

It Is Not Funded by Government Taxpayer Money

This is a distinction that matters. When people hear "government scheme," many assume the funding comes from central government tax revenue. It does not. ECO is a regulatory obligation on private companies. Suppliers who miss their ECO targets face financial penalties from Ofgem. The cost of meeting the obligation is spread across the supplier's full customer base through energy bills.

This is also why ECO support is not available to everyone — it is targeted at specific households because supplier obligation budgets are finite, and the scheme's rules determine who gets priority.

It Is Not the Same as the Boiler Upgrade Scheme or Warm Homes Local Grant

The Boiler Upgrade Scheme (£7,500 off a heat pump) and the Warm Homes: Local Grant (council-led home improvements for lower-income households) are separate programmes funded directly by DESNZ from central government. They have different eligibility routes, different delivery mechanisms, and different purposes. ECO4, BUS, and the Warm Homes Local Grant can work alongside each other — an ECO4 insulation package followed by a BUS heat pump grant, for example — but they are independent schemes and require separate applications.

The History of the ECO Scheme: ECO1 to ECO4

Understanding how the scheme evolved matters because each phase had different eligibility rules, and some households received support under earlier phases that would no longer qualify under ECO4.

ECO1: 2013 to 2015

The scheme launched with a dual purpose: reducing carbon emissions across the housing stock through the Carbon Emissions Reduction Obligation, and helping fuel-poor households through the Home Heating Cost Reduction Obligation. Early ECO1 delivered a high volume of cavity wall and loft insulation installations across the UK. The focus was broad — many installations went to households that were not particularly low income, because the carbon reduction target drove volume over targeting.

ECO2 and ECO2T: 2015 to 2018

ECO2 tightened the targeting and introduced a more explicit Affordable Warmth Obligation, focusing resource on households struggling most with heating costs. ECO2T was a transitional extension period bridging to ECO3.

ECO3 and ECO3T: 2018 to 2022

ECO3 consolidated the scheme under a single Home Heating Cost Reduction Obligation, dropping the separate carbon reduction strand and placing all emphasis on low-income and vulnerable households. This was the phase that most established the "benefits or low income" eligibility model that ECO4 continues. ECO3T bridged the transition into ECO4 between April and July 2022.

ECO4: July 2022 to December 2026

ECO4 is the current and most likely final phase of the scheme in its existing form. It introduced the whole-house retrofit approach as its defining characteristic — a direct response to the recognised failure of earlier phases to make lasting improvements. Installing loft insulation in a house with cold solid walls and an inefficient boiler helps, but does not solve the problem. ECO4 requires that the package of measures installed is sufficient to lift a property by at least two EPC bands, treating the property as a system rather than a collection of separate defects.

ECO4 also introduced ECO4 Flex as a formalised local authority referral route, widening access for households in fuel poverty who do not receive qualifying benefits. It runs until 31 December 2026, following a nine-month extension from the original March 2026 close date. Budget: approximately £1 billion per year, £4 billion across the full scheme period.

What the ECO Scheme Covers in 2026

Under ECO4, eligible households can receive a tailored package of funded measures. The specific measures depend on what a PAS 2035 Retrofit Assessment identifies as needed to achieve the two-band EPC improvement target.

Insulation Measures

Loft insulation, cavity wall insulation, solid wall insulation (internal or external), underfloor insulation, and park home insulation are all within scope. Insulation is the most common measure funded, and in most cases it forms the foundation of any ECO4 package before heating measures are added.

Heating System Upgrades

Boiler repair or replacement where the existing system is inadequate, first-time central heating installation in properties currently without a wet system, air source heat pumps, and district heat connections are all eligible measures under ECO4.

Solar PV

Solar photovoltaic panels can be funded under ECO4 as part of a wider package where they contribute to the EPC band improvement target. They are not generally funded as a standalone single measure.

What ECO4 Does Not Fund

Like-for-like gas boiler replacement in a well-functioning heating system is not funded as a standalone ECO4 measure. The scheme targets homes that need significant improvement, not routine appliance replacement in otherwise adequate properties.

Who Qualifies for the ECO Scheme in 2026

Eligibility under ECO4 works through two routes.

Route 1: Qualifying Benefits

A member of the household must receive at least one qualifying means-tested benefit. The list includes Universal Credit, Pension Credit (Guarantee and Savings Credit), Income Support, income-based JSA, income-related ESA, Housing Benefit, Child Benefit, Child Tax Credit, and Working Tax Credit. The property must also be rated EPC band D, E, F, or G.

Route 2: ECO4 Flex — Low Income and Vulnerability

Local councils can refer households that do not receive the qualifying benefits above but are in or at risk of fuel poverty. Each council sets its own local criteria — most use a gross household income threshold of around £31,000 to £36,000 — and may also qualify households based on health vulnerability, age over 65, or having young children in the home.

ECO4 Flex is the route that most closely resembles the old Affordable Warmth group from earlier ECO phases.

The GBIS: What It Was and Why It Is Closed

The Great British Insulation Scheme — sometimes called GBIS or ECO+ — ran alongside ECO4 as a separate but related programme. Where ECO4 focused on the most fuel-poor households with whole-house packages, GBIS had broader eligibility and funded single insulation measures for a wider range of properties, including those in Council Tax bands A to D with an EPC of D or below.

GBIS closed to new applications on 31 January 2026. It is not accepting new referrals. If you saw content online describing GBIS as an active application route, that content is out of date. For current insulation support, the relevant routes are ECO4, the Warm Homes: Local Grant, and in some areas local authority schemes.

The ECO Quality Warning: What Ofgem and DESNZ Said

On 23 January 2025, the Department for Energy Security and Net Zero issued a statement about potential quality concerns with some ECO and GBIS installations. This is mentioned on Ofgem's own ECO information pages but rarely appears in consumer-facing content about the scheme.

The concerns related primarily to solid wall insulation installations where workmanship or specification did not meet the required standards, in some cases causing damp or ventilation problems rather than solving them.

What this means for you practically: if you receive ECO4-funded solid wall insulation and have concerns about the quality of the work, you have a right to raise a complaint. Your first step is contacting the installer directly. If unresolved, the complaint goes through TrustMark's consumer redress process — all ECO4 installers are required to be TrustMark registered. GOV.UK also has dedicated guidance on what to do if you have received poor quality wall insulation.

This is not a reason to avoid the ECO scheme. The majority of installations are carried out correctly. It is information you should have before work starts so you know what recourse is available.

Does the ECO Scheme Apply to Flats and Apartments?

This is one of the most frequently asked questions about the scheme and one of the most inconsistently answered by online guides.

Owner-Occupied Flats

If you own your flat outright or have a mortgage and receive a qualifying benefit, you can in principle qualify for ECO4. The practical challenge is installation. Cavity wall insulation is rarely feasible in purpose-built flats. Solid wall insulation on an individual flat within a larger block requires building owner permission and coordination with other residents. Loft insulation is only relevant to the top-floor flat directly below the roof. In practice, ECO4 installations in flats are less common than in houses because the measures available are more restricted.

Private Renters in Flats

Private tenants in flats who qualify through benefits or ECO4 Flex can apply — but landlord written consent is a legal requirement before any work proceeds. In a leasehold flat, freeholder consent may also be needed depending on the lease terms. This adds a layer of complexity that can slow or block installations in some cases.

Social Housing Flats

Social housing tenants in flats rated EPC E, F, or G may qualify for insulation or first-time heating measures. The social landlord is the appropriate first point of contact rather than an energy supplier.

What Comes After ECO4: The Warm Homes Plan

ECO4 is widely expected to be the final phase of the ECO scheme in its current form. The government has signalled a transition toward the broader Warm Homes Plan — a £13.2 billion investment programme running from 2025 to 2031 that sits within the Clean Energy Superpower Mission and aims to upgrade up to five million homes across Great Britain.

The Warm Homes Plan is not a single scheme with a single application form. It is a policy framework that funds several delivery programmes including the Warm Homes: Local Grant and successor schemes to ECO4 and GBIS. The detailed design of post-ECO4 supplier obligation schemes beyond December 2026 had not been finalised at the time of writing.

If you think you may qualify for ECO4, the important thing is not to wait for whatever comes next. The rules, amounts, and eligibility criteria of successor schemes are unknown. The current scheme and its eligibility criteria are known. Apply now if you qualify.

Scheme Availability by UK Nation

Scotland

Scottish households can access ECO4 through energy suppliers in the same way as England and Wales. Home Energy Scotland also administers Warmer Homes Scotland — a fully devolved Scottish Government scheme with no firm closing date — for low-income and vulnerable households including those in remote communities across the Highlands, Western Isles, Orkney, and Shetland. Contact Home Energy Scotland free on 0808 808 2282.

Wales

ECO4 operates in Wales through energy suppliers. The Welsh Government's Nest scheme covers lower-income Welsh households who may not access ECO4 directly. Contact Nest at nestwales.org.uk.

Northern Ireland

ECO4 and GBIS do not apply in Northern Ireland. The Affordable Warmth Scheme, run by the Northern Ireland Housing Executive, covers lower-income households in NI with income under £23,000. The NI Energy Advice line is 0800 111 44 55.

Frequently Asked Questions

What is the government ECO scheme? The Energy Company Obligation (ECO) is a UK government scheme that legally requires large energy suppliers to fund free energy efficiency improvements for eligible lower-income and fuel-poor households. It is not funded by taxpayers — suppliers fund it and recover the cost across their customer base. The current phase, ECO4, runs until 31 December 2026.

Is the ECO scheme still running in 2026? Yes. ECO4 closes 31 December 2026. However, with installations taking 10 to 18 weeks, the practical window for new applications is closing fast. If you believe you qualify, contact your energy supplier or local council now.

What did the government ECO scheme pay for? Under ECO4, it pays for loft insulation, cavity wall insulation, solid wall insulation, boiler repair or replacement, first-time central heating, air source heat pumps, and solar PV — as part of a whole-house package tailored to the specific property.

Is the GBIS the same as the ECO scheme? No. GBIS (Great British Insulation Scheme) was a separate but related programme that funded single insulation measures for a broader group of households. GBIS closed to new applications in January 2026. ECO4 remains open until December 2026.

Who pays for the ECO scheme? Obligated energy suppliers — not central government or taxpayers. Ofgem places a legal obligation on large suppliers to fund ECO measures. Suppliers recover this cost across their customer base through energy tariffs.

Can I get ECO scheme support if I live in a flat? Possibly, but it is more complex than for houses. Feasibility depends on the type of flat, the measures available, landlord or freeholder consent, and whether the property qualifies under the EPC and benefits criteria. A survey from an Ofgem-registered installer is the best way to find out what is available for your specific property.

What comes after ECO4? The Warm Homes Plan is the government's broader successor framework, involving £13.2 billion for home energy improvements across Great Britain between 2025 and 2031. The specific post-ECO4 supplier obligation scheme design had not been finalised by August 2026. Do not wait for successor schemes — apply now if you qualify for ECO4.

Is ECO4 available in Northern Ireland? No. Northern Ireland is not covered by ECO4. The Affordable Warmth Scheme, administered by the Northern Ireland Housing Executive, is the main equivalent. Contact NI Energy Advice on 0800 111 44 55.

How InstantGrant Can Help

Navigating the difference between ECO4, GBIS, the Boiler Upgrade Scheme, and the Warm Homes: Local Grant takes time — especially when online content about these schemes is frequently out of date or uses the wrong scheme name entirely.

InstantGrant is an independent grant information and application-support service. We help UK households understand the current scheme landscape, work out which programme applies to their specific situation, and approach the right route with accurate, up-to-date information.

We are not the government, Ofgem, or any energy supplier. We do not administer any scheme and we do not guarantee any outcome. We help you start the process clearly.

Check your eligibility at instantgrant.co.uk