ECO4 Grant Explained: A Complete Guide to Funding for Energy-Efficient Home Improvements

ECO4 Grant Explained: A Complete Guide to Funding for Energy-Efficient Home Improvements

The UK government has made energy efficiency a national priority, especially in the face of rising energy prices and climate change concerns. One of the main initiatives supporting this mission is the ECO4 grant, part of the Energy Company Obligation (ECO) scheme. Designed to help households become more energy efficient, ECO4 provides funding to improve heating systems, insulation, and reduce carbon emissions.

In this article, we break down the ECO4 grant—what it is, who qualifies, what types of improvements it covers, and how to apply.

What Is the ECO4 Grant?

ECO4 is the fourth phase of the Energy Company Obligation scheme. It runs from April 2022 to March 2026 and is aimed at helping low-income, fuel-poor, or vulnerable households improve the energy efficiency of their homes. Under the ECO scheme, energy suppliers are obligated to fund energy-saving improvements, which can significantly reduce heating bills and improve home comfort.

ECO4 is the continuation of earlier schemes (ECO1–ECO3) and places a stronger emphasis on whole-house retrofitting, meaning it aims to improve the overall efficiency of a home rather than making one-off fixes.

Objectives of the ECO4 Scheme

The key goals of the ECO4 scheme are:

• Lower household energy bills

• Reduce fuel poverty

• Cut carbon emissions

• Support the UK’s target of net-zero by 2050

To meet these objectives, ECO4 focuses on long-term, sustainable solutions—especially in homes that are currently underperforming in terms of energy use.

Who Is Eligible for ECO4?

ECO4 targets households that are either:

1. Receiving certain income-related benefits, or

2. Deemed low-income or fuel-poor through local authority or supplier-led routes (called LA Flex or LAFlex).

Benefits-Based Route

If someone in your household receives any of the following qualifying benefits, you may be eligible:

• Income-Based Jobseeker’s Allowance (JSA)

• Income-Related Employment & Support Allowance (ESA)

• Income Support

• Pension Credit Guarantee Credit

• Working Tax Credit

• Child Tax Credit

• Universal Credit

• Housing Benefit

• Pension Credit Savings Credit

• Child Benefit (with income threshold)

LA Flex Route

Local authorities can also identify eligible households even if they don’t receive benefits. This route supports residents who are:

• Living in fuel poverty

• On a low income with high energy bills

• Vulnerable to cold due to health or age

LA Flex criteria vary by local council, so it’s worth checking your local guidelines.

What Types of Homes Qualify?

ECO4 primarily targets homes that have low Energy Performance Certificate (EPC) ratings. Generally, properties with an EPC rating of D, E, F, or G are eligible. The goal is to upgrade homes to at least a band C, or as high as possible, depending on property type and funding limits.

The scheme applies to both on-gas and off-gas homes, meaning households not connected to the mains gas network can also benefit.

What Measures Are Covered?

ECO4 supports a wide range of energy-saving home improvements. These include:

1. Insulation Measures

• Loft insulation

• Cavity wall insulation

• Solid wall insulation

• Underfloor insulation

• Room-in-roof insulation

2. Heating Measures

• First-time central heating (where no system existed before)

• Boiler upgrades (only in specific circumstances)

• Electric storage heaters

• Air source heat pumps

• Heating controls

3. Renewable Technologies

• Solar photovoltaic (PV) panels

• Smart heating systems

4. Ventilation Improvements

• Trickle vents, extract fans, and other ventilation solutions are included to ensure proper airflow and maintain indoor air quality.

Importantly, under ECO4, boiler-only replacements are limited. The scheme now encourages broader, whole-house solutions instead of quick fixes.

How Does the Process Work?

The process for receiving help under ECO4 generally follows these steps:

Step 1: Eligibility Check

You (or your installer) will need to assess whether your household qualifies through benefits or LA Flex.

Step 2: Home Assessment

A qualified assessor will visit your home to conduct a survey and review your EPC rating. Based on this, a plan will be developed to improve energy efficiency.

Step 3: Funding Allocation

If eligible, the scheme will cover some or all of the installation costs, depending on the measures recommended and your property's condition.

Step 4: Installation

Approved contractors will carry out the work at no or reduced cost. All installations must meet the required standards under ECO4 rules.

How Is ECO4 Different from Previous Schemes?

While ECO3 focused largely on singular improvements like boiler replacements or insulation, ECO4 takes a whole-house approach. This means more comprehensive solutions are preferred, and multiple upgrades may be recommended to achieve a better EPC rating.

Some major differences include:

• Greater focus on fabric-first improvements (insulation before heating systems)

• Support for renewables like solar panels

• Limited use of gas boiler replacements

• Emphasis on long-term carbon savings

How Much Can Households Save?

The actual savings vary depending on the improvements made and the property's initial condition. However, by improving insulation and installing energy-efficient systems, households can potentially save hundreds of pounds per year on energy bills.

For example:

• Loft insulation can save up to £400/year

• Cavity wall insulation can save £300–£500/year

• Solar panels can reduce reliance on the grid, leading to long-term savings

Common Misconceptions About ECO4

"It's only for people on benefits."

Not true. While many households qualify through benefits, the LA Flex route makes it available to a wider audience, including those on low incomes or with high heating costs.

"It only covers insulation."

ECO4 includes a broad mix of measures including heating upgrades, solar panels, and ventilation systems, depending on your home's needs.

"I have to pay everything back."

The ECO4 scheme is a grant, not a loan. Most eligible households receive improvements completely free or heavily subsidised.

Final Thoughts

The ECO4 grant is a valuable opportunity for households to improve their home’s energy efficiency, reduce bills, and support the UK’s green energy goals. With a focus on the most vulnerable and energy-inefficient homes, it provides meaningful long-term benefits for residents and the environment.

Understanding your eligibility and the steps involved can help you take full advantage of what the scheme offers. If you think you might qualify, the best next step is to reach out to a qualified assessor or check your local council’s LA Flex program for more information.