Energy Companies Obligation (ECO)

The Energy Companies Obligation (ECO) is designed to ensure that large energy suppliers help to improve energy efficiency in low income or vulnerable households and communities. The ECO was implemented in 2013 to replace the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP).

ECO is intended to  work alongside the Green Deal to provide additional support in the domestic sector, with a particular focus on vulnerable consumer groups and hard-to-treat homes.

ECO outlines three main targets: Carbon Emissions Reduction, Community Obligation and Home Heating Cost Reduction

ECO targets

The ECO outlines three distinct areas that the energy suppliers are obliged to help make improvements on:

Carbon Emissions Reduction Obligation

As some homes cannot be fully supported by the Green Deal, energy suppliers are obliged to focus their efforts on these hard-to-treat homes. The main improvement areas include supply of solid wall insulation and cavity wall insulation. Additional insulation measures are also eligible if they are promoted as part of a package that includes solid wall insulation or hard-to-treat cavity wall insulation.

Community Obligation

Energy companies must focus on the provision of insulation measures and connections to domestic district heating systems supplying areas of low income. 15% of this obligation must be made up of low income and vulnerable households within rural areas.

Home Heating Cost Reduction Obligation

Energy suppliers are required to provide measures to help low income and vulnerable households afford to heat their homes. This can include better insulation or even replacement boilers to improve energy efficiency and reduce energy bills.

For more information on the ECO programme, visit the Ofgem website.