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What you need to know about ECO4

What you need to know about ECO4

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What is ECO4?

The ECO4 scheme is a mechanism to help households go 100% carbon neutral. The ECO4 scheme is specifically designed to help provide grants to eligible households to fund energy efficient upgrades to homes. The grants can help pay for various energy saving measures like new boilers or cavity wall insulation for example that are designed to increase energy efficiency in households and in turn reduce fuel poverty and energy costs. ECO4, the latest iteration of the Energy Company Obligation scheme, was due to commence on 1st April 2022.  However, due to delays in the Government consultation process, ECO4 is now planned to commence on 1st July 2022, subject to the necessary legislation successfully being passed in Parliament.

Who is eligible?

To be eligible for ECO4, a project (one or more measures installed in a single property) will have to meet a minimum requirement for improving the SAP rating of that property.  Additionally, the current (starting) SAP rating of the property has to be E, F or G (there are some scenarios where higher SAP band properties are eligible) and it has to be an eligible household – deemed to be in fuel poverty as a result of either being in receipt of a qualifying benefit or being eligible under a Flexible Eligibility scheme.

How ECO4 Scoring works

The ECO4 Score (or value) will be determined from 3 factors:

  • The starting (pre-install) SAP score
  • The finishing (post-install) SAP score
  • The floor area of the property

Note that this is referred to as the Full Project Score (FPS). To further complicate matters, rather than going simply off the SAP score, the scores have been split into a series of bandings e.g. Below 10.5 (Low G SAP band) – 96.0 and above (High A SAP band).

The minimum requirement

There is a minimum requirement for increasing the SAP rating of the property. If the starting SAP band is F or G (low or high), then the finishing SAP band has to be at least D (low or high); if the starting SAP band is E (low or high) then the finishing SAP band has to be at least C (low or high). Projects can obviously go beyond the minimum requirement, and the ECO Score will be higher to reflect that. Floor areas have similarly been banded, with 4 bands being applicable.

Partial and Full Project Score

Given the more extensive nature of Retrofit projects expected under ECO4, installers will have a period of 3 months to complete the project.  It is recognised this may introduce cashflow challenges for some businesses, so to address this, the concept of Partial Project Scores (PPS) and Full Project Scores (FPS) has been introduced.

The PPS is based on the measure installed; the project starting SAP band; the TFA and, for heating measures, the pre and post main heating source for the property.  The PPS for a measure is awarded when that measure is lodged on the TrustMark Data Warehouse as TrustMark are introducing the ability to do lodgements for a project under ECO4, referred to as Stages of the Retrofit Plan.

To further complicate matters, the PPS is deflated by 20%, to encourage completion of the project.

The FPS is NOT the sum of the individual measure PPS’s. On completion of a project, the FPS will be calculated separately and any net amount due awarded.

All ECO4 scores are based on estimated Annual Bill Savings for the respective measure(s)/project and have been produced by BRE on behalf of Ofgem.

PAS Requirements

ECO4 will require PAS2035 / PAS2030:2019 certification and all projects will need to be managed by a TrustMark Approved Retrofit Coordinator. View our courses here.

Unlike previous iterations of the scheme, which have always taken a measure led approach, ECO4 has been designed to be more aligned with PAS2035 and follow a whole-house approach.

Government Response to ECO4

View the latest government ECO4 document here.

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