ECO4

The Energy Company Obligation (ECO) began in 2013. ECO4 is its fourth phase, set by the Electricity and Gas (Energy Company Obligation) Order 2022 (SI 2022/875). It covers measures installed from 1 April 2022 in England, Wales and Scotland. DESNZ sets the policy and Ofgem runs it.

The Order sets an overall target, the Home Heating Cost Reduction Obligation. Ofgem splits it between obligated suppliers by their share of the domestic gas and Elec market. An Elec licence holder is obligated if, in a qualification year, it supplied 300 GWh or more and had 150,000 or more domestic customers. For gas the volume test is 700 GWh. Suppliers meet their share by funding measures such as insulation and heating upgrades in eligible homes, and have recovered the cost through domestic energy prices.

The November 2025 Budget said ECO would not be renewed and that its funding through energy costs would stop after 31 March 2026. The government estimated this would save households £59 a year on average from April 2026. In 2026 DESNZ extended ECO4 by nine months to 31 December 2026, so suppliers can meet their existing targets and fix non-compliant installations. No supplier obligation will follow it. The government is adding £1.5bn of grant funding for low-income households through the Warm Homes Plan instead.

Key facts:

• Set by the Electricity and Gas (Energy Company Obligation) Order 2022 (SI 2022/875)
• Originally due to end on 31 March 2026; extended to 31 December 2026
• Ofgem shares the target between suppliers by domestic market share
• The Great British Insulation Scheme, a separate supplier obligation, ended as planned on 31 March 2026
• No successor obligation after ECO4

EnergyCode does not hold ECO4 as a per-period rate, and it is not seeded in the Other costs section of the Pricing Engine. It is not priced bottom-up and not validated on invoices.