The Energy Company Obligation (ECO) is the UK’s flagship energy efficiency programme. Supplier obligations have been the cornerstone of the UK’s home energy efficiency policy for more than three decades, making ECO a mature, tested and dependable model which delivers lasting benefits.
A simple, proven mechanism delivering lasting benefits
The scheme’s purpose is simple: to make homes warmer, cheaper to heat and more energy efficient, particularly for people on lower incomes or living in vulnerable circumstances.
How it’s funded
Unlike grant-funded schemes, ECO is delivered and funded by energy suppliers, not general taxation. It’s funded through a modest levy on household energy bills which equates to around £40-£45 per dual-fuel household each year.
Since 2013 ECO has delivered:
- 2.6 million homes upgraded with over 4.3 million insulation & heating measures
- More than £20 billion in household bill savings
- Health, comfort and wellbeing improvements for hundreds of thousands of families
- Over 70 million tonnes of reduction in UK CO2e, contributing to carbon-budget target
- A UK retrofit market worth over £15 billion, employing around 80,000 skilled workers
- 1000s of new green jobs and apprenticeships, developing skills essential for the UK transition to net zero
ECO pays back far more than it costs by reducing national energy demand, stimulating local economies and making homes cheaper to heat for decades.
Why it matters
ECO brings immediate energy bill savings for upgraded households, plus long-term savings because energy-efficient homes remain cheaper to heat for years. The programme functions as a vital safety net for people facing fuel poverty, by upgrading inefficient homes that drain household finances and contribute to ill health.
ECO is a well-established, dependable scheme – what sets it apart from other funding mechanisms is its regulatory structure. As a licence condition for energy suppliers, it gives them a direct, Ofgem-enforced obligation to achieve measurable outcomes. The model’s track record demonstrates its ability to adapt, improve and sustain delivery at scale.
ECO contributes directly to two central UK Government objectives:
- Alleviate fuel poverty: helping low-income and vulnerable households reduce energy bills and live in warmer, healthier homes
- Carbon reduction and net zero: cutting emissions from UK housing stock, one of the biggest sources of energy demand
The ECO programme underpins a national retrofit market worth more than £15 billion and supports around 80,000 skilled jobs in insulation, heating, renewable energy and retrofit management.
By giving businesses long-term visibility and regulated demand, ECO sustains investment in training, apprenticeships and local employment in every part of the country, helping spread economic opportunity and build the skills base needed for schemes like the Warm Homes Plan.
Over the past decade, the ECO scheme has built a nationwide delivery network of accredited installers, managing agents, manufacturers and local partners. This ecosystem of expertise, compliance systems and workforce is the foundation of a retrofit industry that can grow and adapt to meet the UK’s future energy and climate goals.
Without ECO, millions of people facing fuel poverty would miss out on cheaper energy bills, warmer greener homes and better health outcomes. Its removal would impact the retrofit sector, affect economic growth and significantly limit the UK Government's ability to meet long-term carbon reduction targets.