The energy company obligation scheme
This guide is intended to provide general guidance only. It is not intended to give you advice on your personal financial circumstances. You should seek independent professional advice if you’re unsure about anything mentioned in this guide or what choices to make.
Would you like to make your home warmer?
Are you thinking of insulating your walls or loft?
Would you struggle to pay for the work without financial help?
Then you might benefit from the energy company obligation scheme.
What exactly is the energy company obligation scheme?
The energy company obligation (ECO) scheme was introduced by the government in 2013. It’s designed to encourage energy suppliers to help customers make their homes easier and cheaper to heat.
The idea is that the energy companies offer grants to customers on low incomes, to help them pay for energy-saving home improvements. This should then save them money on gas and electricity bills.
ECO works in tandem with the government’s Green Deal scheme to help people borrow money, or apply for grants, to pay for improvements like insulation, boiler repairs or solar panels.
The government believes around 230,000 homes would qualify for energy company obligation funding.
Would I qualify for energy company obligation help?
You could qualify for energy company obligation funding if you are thinking about making your home more energy efficient and:
- You live in a low-income or vulnerable property
- Your home is in a low-income neighbourhood
- Your home improvements wouldn’t qualify for a Green Deal loan
- You get Pension Credit
- Or you get Child Tax Credit and your yearly income is £15,860 or less
You need to own the property you want the grant for – or you can apply to improve a privately rented property if you get your landlord’s permission first.
If you don’t get either Pension or Child Tax Credit, you might still qualify if you receive one of these benefits:
- Working Tax Credit – if you earn £15,860 or less
- Income Support
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance (ESA)
AND meet one of these conditions:
- You get a disability, pensioner of disabled child premium
- You look after a child under 16 – or under 20 if they’re still in education or training
- You get Working Tax Credit and are aged 60 or over
- You get the supported or work-related element with the ESA
To find out whether you qualify for energy company obligation funding, get in touch with the Energy Saving Advice Service. You can call them on 0300 123 1234 – Monday to Friday, 9am – 8pm or Saturday 10am – 2pm. Visit this page to see how much the call might cost you.
They can talk you through the criteria for energy company obligation eligibility so you can decide whether it’s right for you.
What kind of help could I get?
There are three separate ‘obligations’: the affordable warmth obligation, the carbon emissions reduction obligation, and the carbon saving communities obligation. Read on to find out what these snappy titles could mean to you and your home.
What is the affordable warmth obligation?
This obligation means that your energy company should offer to upgrade the heating and insulation in low-income homes (although this doesn’t include social housing).
It could pay to repair or replace your boiler, or provide loft or wall insulation.
It’s designed to help people who might be vulnerable to the effects of living in a cold home, like pensioners or young children.
What is the carbon emissions reduction obligation?
This is sometimes called the carbon saving obligation. It means your energy supplier could help you financially with:
- Insulating solid walls (usually on older buildings) that might need cladding on either the inside or outside
- Cavity wall insulation for homes built after the 1930s
- Loft insulation
- Connections to district heating systems
- Double glazing
- Draught proofing
What is the carbon saving communities obligation?
This initiative is designed to improve home insulation and connection to district heating systems in low-income areas. Energy companies have to use 15% of these energy company obligation grants to improve homes in villages or the countryside.
How do I apply for an energy company obligation grant?
Start by contacting the Energy Saving Advice Service. You can call them on 0300 123 1234 – Monday to Friday, 9am – 8pm or Saturday 10am – 2pm. Visit this page to see how much the call might cost you.
They’ll help you work out whether you qualify for energy company obligation funding. If you do, they’ll explain what to do next and how to apply.
How else can I cut my energy costs?
If you can’t start improving your home yet or you’re waiting for energy company obligation funding to come through, here are some other cost-cutting suggestions to tide you over.
To start with, you could reduce the amount of energy you use and cut down your bills by making sure your home and all your electrical appliances are working as efficiently as possible.
Here are six ways to become more energy efficient:
- When you boil a kettle, only use as much water as you need
- Turn appliances off at the wall – don’t leave them on standby
- Use energy-saving light bulbs
- Defrost your freezer regularly
- Make draught excluders for outside doors, windows and letterboxes – see instructions for a lovely one here
- When you’re using your washing machine, never set it at more than 30 degrees
See our full energy saving guide for more details.
Could I cut costs by switching providers?
Energy company prices go up and down, so it’s always worth taking a look at the comparison sites regularly to see whether you could pay less with a different supplier.
At OVO, we work hard to keep our costs down and offer you a fair price. We also offer you a 3% OVO Interest Reward whenever your account’s in credit.
It’s quick and simple to compare your current provider’s prices with our range of energy plans – whether you’re interested in electricity or gas on its own, or a dual fuel plan. They’re based on a medium user, paying by Direct Debit, averaged across all UK regions.
Take a look to find out what you could save now.