ECO: How it works and why it matters
13 November 2025
As the UK’s flagship energy efficiency programme, the Energy Company Obligation (ECO) is a proven model which has been delivering lasting benefits since 2013. Its aim is simple: to make homes warmer, cheaper to heat and more energy efficient, particularly for those on lower incomes or in vulnerable households.
We’ve put together a clear overview outlining how the ECO scheme works, why it matters – and why it deserves to continue.
A strong track record
ECO is delivered and funded by energy suppliers as part of their licence, ensuring they meet the Ofgem-enforced obligation to achieve measurable outcomes. Through this, ECO has shown its ability to adapt, improve and sustain delivery at scale.
Delivering long-lasting benefits
ECO brings both immediate energy bill reductions as well as long-term savings, with upgraded energy-efficient homes remaining cheaper to heat for years.
Since 2013 the ECO programme has:
- Upgraded 2.6 million homes
- Installed 4.3 million insulation & heating measures
- Delivered more than £20 billion in household bill savings
- Helped build a retrofit market worth over £15 billion, employing around 80,000 skilled UK workers
- Created 1000s of new green jobs and apprenticeships
- Reduced UK CO2 emissions by more than 70 million tonnes
- Improved health, comfort and wellbeing for hundreds of thousands of families
Tacking fuel poverty and reducing carbon emissions
ECO supports both government commitments and communities, by helping vulnerable households reduce energy bills and live in warmer, greener homes – while cutting emissions from UK housing stock, one of the biggest sources of energy demand.
Creating jobs, skills and economic growth
ECO has been key in developing the UK retrofit market, through 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, building skills needed for schemes such as the Warm Homes Plan.
Supporting the Warm Homes Plan, carbon budgets and Net Zero
The nationwide delivery network built through ECO represents an ecosystem of expertise, compliance systems and skilled workers. The scheme has contributed to the foundation of a retrofit industry that can meet the UK’s future energy and climate goals.
ECO pays back far more than it costs by reducing national energy demand, stimulating local economies and making homes cheaper to heat for decades. Without it, millions would miss out on lower energy bills, warmer homes and healthier lives.
