Energy Company Obligation (ECO)

The Energy Company Obligation (ECO) is an obligation that the Government puts on the big six energy suppliers to help householders reduce their energy bills by making their homes more energy efficient.

There are currently two parts to the ECO.  These are:

  • Home Heating Cost Reduction Obligation (HHCRO) still sometimes referred to as the Affordable Warmth Obligation
  • Carbon Emissions Reduction Obligation (CERO)

For a full list of the energy improvement measures available under each stand of ECO see the Energy Companies Obligation (ECO): Measures Table.

The Home Heating Cost Reduction Obligation

The HHCRO is means tested and can be used to pay for heating and insulation improvements for low-income and vulnerable households.  Currently is it is being used mainly to pay for central heating boiler replacements.  It is available to owner occupiers and to private renters.  It is not available if you rent your home from the Council or a Housing Association.

Householders can find out if they are eligible by calling the Energy Saving Advice Service on 0300 123 1234.  People that are eligible for this support should not expect to pay themselves for a Green Deal Assessment.

The Carbon Emissions Reduction Obligation

CERO is not means tested and it there to help householders meet the cost of insulating solid wall properties (which most pre 1930’s houses are) and hard to treat cavities.

A hard to treat cavity would typically be those cavities which are less than 50mm wide or blocks of flats which are more than 3 storeys high.  If you use CERO to help fund these insulation measures you will also be eligible for help with the cost of other measures delivered as part of a package e.g. loft insulation, replacement glazing and under-floor insulation.

The value of the CERO is based on the number of tonnes of carbon saved over the lifetime of the measure (36 years for solid wall insulation) less a predefined in use factor.  The variable is the value of a tonne of carbon.  Green Deal Providers access CERO either through negotiation with one of the big six energy companies or through an auction process.

The value of a tonne of carbon has dropped very dramatically in the last few weeks as a result of the Government’s consultation on the ECO (which proposes extending the length of time energy companies have to meet their obligations under the ECO and the targets that they have to reach). It is certainly worth shopping around Providers to find one that can offer you CERO at the best rate.