What is the Energy Companies Obligation (ECO)?

The UK’s government is currently looking at new ways to improve the country’s Green House Gas emissions and this new scheme has been introduced in Britain to run alongside the country’s Green Deal. The scheme is worth £1.3billion per year and was set up to ensure that the largest suppliers deliver energy efficiency measures to as many domestic users as possible. The scheme specifically focuses on low income homes, vulnerable consumers and hard to treat homes and has replaced The Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP) which were phased out at the end of 2012.

The only suppliers obligated by the ECO scheme will be those that currently have more than 250,000 domestic customers and provide over 400 gigawatts of electricity or 2,000 gigawatts of gas. Credits can then be awarded to the supplier for each efficient measure that is installed into a domestic property and for delivering their obligations as cheaply as possible.

The ECO scheme is funded by the energy suppliers under obligation and they can determine how much each consumer will receive. This will depend on individual circumstances and will also take into consideration the Green Deal finance being used. Although energy companies are responsible for the cost of delivering their obligations and no government funding is involved, it is a general rule that these costs will be passed onto consumers via their energy bills.

ECO will be provided directly by energy suppliers to consumers or by pre-approved organisations working in conjunction with them such as Green Deal providers.