The future of the Energy Company Obligation

Boosting delivery to tackle fuel poverty and upgrade homes

View of houses in England
A view of houses in Sheffield. Photo by Benjamin Elliott on Unsplash.

ECO has been the main pillar of the UK’s domestic fuel poverty alleviation and domestic energy efficiency programme over the past decade. Over this time, it has delivered over 2 million improvements to homes. Its success is owed to the strength of the regulation and the expertise and clout of the energy suppliers which deliver it.

In 2022, the 4th iteration of the programme was introduced. The scheme guidance changed drastically to increase the overall investment per home and introduced requirements which have shrunk the overall pool of homes which are eligible for works. As a result, delivery in the first year (2022/23) was slow. Although progress has been made since then, we think the underlying principles of the scheme need to be reviewed and realigned so that ECO helps to deliver our fuel poverty and energy efficiency targets.

The briefing sets out the terms of a review of the obligation, split into 6 chapters outlined in the figure below. We think ECO should continue as a key pillar in the set of policies used to upgrade homes, alongside a growing local authority led arm and consumer-led policies. To maximise ECO’s potential to help meet the statutory 2030 fuel poverty target, review of the obligation will be essential.


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