With the prospect of another freezing cold winter just around the corner, the Energy Company Obligation (ECO) can make a real difference to those living in poorly insulated homes. This home energy efficiency scheme is a government initiative overseen by Ofgem, made to tackle both fuel poverty and carbon emissions. By offsetting the cost of heating improvements, such as insulation, double glazing or a new boiler, ECO aims to help households save on their energy bills in the long run.
What is Energy Company Obligation?
Initially launched in January 2013, the aim of the Energy Company Obligation is to both reduce carbon emissions and help households lower their heating costs. The scheme obliges larger energy suppliers, including the ‘Big Six’ of British Gas, EDF, Eon, Npower, Scottish Power and SSE, to deliver measures to make homes more energy efficient including, though not limited to:
- Cavity wall insulation
- Double glazing
- Loft insulation
- Solid wall insulation
- Subsidised boiler replacement or repair
- Double glazing
- Draught proofing
The latest iteration of the programme, ECO3, was introduced in December 2018. It will run until March 2022 and focuses exclusively on more vulnerable customers, such as those on low income who are considered to be living in fuel poverty.
The Energy Company Obligation scheme could cover all or part of your costs when it comes to insulation improvements and boiler repairs.
Do I qualify for ECO3?
Whether you are eligible for funding or not depends on a number of different factors, such as where you live, what improvements your home requires and if you already receive certain means-tested benefits, such as:
- Income-based Job Seeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- ESA with Limited Capacity for Work (LCW)
- Guarantee Credit element of Pension Credit
Depending on the circumstances, you may also qualify if you receive one of the following:
- Universal Credit
- Working Tax Credit
- Child Tax Credit
- Child benefit
- Carer’s Allowance
- Attendance Allowance
- Personal Independence Payment
- Disability Living Allowance
- Industrial Injuries Disablement Benefit
- Mobility Supplement
- Armed Forces Independence Payment
If you live in social housing with an Energy Performance Certificate (EPC) rating of E, F or G you should qualify for ECO grants regardless of your benefits eligibility.
Those already claiming the Warm Home Discount are usually also eligible for ECO3 funding, as long as their energy supplier is participating in the initiative.
Under ECO3, energy providers can also deliver up to 25% of their obligation under new ‘Flexible Eligibility’ set by local authorities. Check with your local council to see if you qualify this way.
How to apply for ECO3
The Energy Company Obligation scheme is only available from a selection of energy suppliers. You will have to apply directly through them to benefit from ECO3.
Which suppliers offer Eco3?
All suppliers with over 200,000 customers have a legal obligation to participate in the scheme, with that threshold set to fall to 150,000 next winter. As of November 2019, the full list of providers signed up to the Energy Company Obligation scheme is as follows:
- British Gas
- The Co-operative Energy
- EDF Energy
- E.on Energy
- Shell Energy (formerly First Utility)
How much can I save through the Energy Company Obligation?
The ECO3 scheme is more about energy savings in the long term, rather than a one-off payment like some other government assisted schemes. Those receiving assistance from their energy provider can save hundreds of pounds on the cost of a new boiler or extra insulation and the savings can run into the thousands over the long term.
Other ways to save energy
As well as applying for the Energy Company Obligation scheme, there are plenty of affordable ways to reduce energy use in your home.
Although they can cost more at the time of purchase, you’ll see a reduction in your bills by replacing old light bulbs with more energy efficient lighting, such as halogen incandescents or compact fluorescent lamps (CFLs).
An easy way to keep the cold out is by using draft excluders around gaps in doors and windows, and installing thicker curtains. By turning your thermostat down by just 1 ̊C you can cut your energy use (and costs!) by up to 10%.
Are there other energy discounts I can apply for?
The Energy Company Obligation is one of a number of schemes designed to assist those most in need in paying their energy bills during the winter months.
Winter Fuel Payment
The Winter Fuel Payment is an annual tax-free heating allowance of between £100 and £300. This government scheme is paid out to those over Pension Credit Age, who may require assistance with their heating costs during the winter.
As this winter fuel allowance is not means-tested, you can still qualify for it if you’re working or claiming benefits.
Warm Home Discount
The Warm Home Discount is another government initiative aiming to provide financial assistance to those who need it most when temperatures drop. Run in partnership with a number of different energy providers, this scheme provides a one-off heating allowance of £140.
To qualify you must either be receiving the Guarantee element of Pension Credit or certain means-tested benefits. However, not all energy suppliers participate in the scheme, so you will have to confirm that yours does prior to applying.
Cold Weather Payment
Another scheme you may be eligible for is the Cold Weather Payment. Aimed at those on a low-income, you may qualify if you are already claiming certain welfare assistance or means-tested benefits, such as Job Seekers Allowance or Universal Credit.
This winter fuel allowance of £25 is paid out between the beginning of November and the end of March whenever temperatures dip below freezing for a period of seven days or more.
Though eligibility criteria varies from one scheme to another, you may also be able to apply for government subsidies, as well as other grants or loans from your local authority or Jobcentre Plus.