A quick guide to ECO4

If you’re a renewables installer, you’ve probably heard of ECO4. Perhaps you’ve given it a Google and got lost in the jargon, perhaps you’ve started an application but gave up halfway through, or perhaps this is the first time you’re hearing about ECO4.

This quick guide is here to give you a quick rundown of all things ECO4, whether it is right for you, how to get involved, and how a leading renewables wholesaler can help you out along the way… if only we knew one of those! 

So, what exactly is ECO4?

Let’s go back to 2013, when the Energy Company Obligation (ECO) was introduced as a UK government-backed initiative which aims to improve the energy efficiency of homes across the UK. The current version, ECO4, was introduced in April 2022 and finishes in March 2026. The scheme offers grants to the UK’s most vulnerable properties, for energy saving solutions such as insulation, boiler upgrades, and of course, solar PV and air source heat pumps (ASHP). These upgrades may cost a small fee for the homeowner, but they can also be completely free. The funding for each project depends on a variety of factors, including eligibility, property type, the installers selected, and the type of Innovation Measure. We’ll get into what exactly an Innovation Measure is later on, don’t panic! These initiatives have been and remain a huge success. As of November 2024, 4.1 million ECO measures have been installed in 2.5 million households, with 666,900 falling under ECO4.

Where does the funding come from?

Funding for ECO4 comes from medium and large gas and electricity suppliers. These suppliers are required by the government to give funds and implement energy efficiency measures based on their individual overall target. The overall target is calculated on the supplier's share of the UK domestic energy market. 

Sounds great, who is eligible for ECO4 funding?

Okay, this can be a little confusing so I’ll try and sum it up nicely. ECO4 funding is available for properties rated D and below on their Environmental Performance Certificate (EPC). However, to qualify for the ECO4 funding, someone living at the address rated D and below needs to also meet the ECO criteria set by Ofgem. The ECO criteria states that a household may qualify if they receive the following benefits; employment and support allowance, income support, housing benefit, jobseekers allowance, pension credit, tax credit, or universal credit.

Or alternatively, a household may qualify under the local authority or ECO4 flex route, if the local authority has issued a statement of intent. Here, households may be eligible based on low income, if they are vulnerable, or based on health grounds.

Why would I want to become an ECO4 installer and what’s this uplift all about? 

Under ECO4, uplift refers to additional funding awarded to projects that incorporate innovation energy efficiency measures. To put it in a nutshell, certain specialist renewables kit have been classified as an “Innovation Measure”, which gives them a higher project score AND allows for more funding available for the installation.

There are two levels of uplift, 25% which shows a reasonable improvement vs standard options, and 45% which shows a substantial improvement. This is based on varying criteria, such as energy efficiency, environmental impact, and cost savings.

On top of this, becoming an ECO4 installer opens up a steady stream of guaranteed work funded by the government. Even when ECO4 is set to end in 2026, ECO5 is in consultation, meaning the steady flow of work will continue. ECO5 is the next phase of the scheme, aiming to build on ECO4 by integrating cutting-edge technology and new eligibility criteria that consider the carbon footprint of households. Sounds good, right?

How do I get involved?

To become an ECO installer, you’ll have to hold PAS2030:2035 accreditation for every measure installed under the scheme and be TrustMark registered, working with Ofgem approved products. Renewables installers will also need to be Microgeneration Certification Scheme (MCS) registered.

What’s the catch?

As Mark, from Ronnan Corp, mentions in Renewable Energy Installer, becoming an ECO4 installer involves abandoning the current business model, adopting an entirely new strategy, and having very deep pockets at the start. 

We’d recommend checking out Ofgem’s ECO4 Guidelines, detailing how the scheme works, what the innovation measures are, who qualifies, and what the evidence process is. But just a heads up, it’s a pretty gruesome 240+ page doc.

Sure, it’s no walk in the park. But with potential profit margins of 30-40%, a steady stream of guaranteed work, and access to a large customer base, becoming an ECO4 installer is not to be sniffed at. 

What’s Midsummer got to do with any of this?

Here at Midsummer, we’ve sourced the latest kit that has been approved as an Innovation Measure, at extremely competitive pricing. If you’re already in the ECO4 game or looking to get into it, here’s a quick summary of the ECO4 approved kit we stock at the Midsummer shop:

InstaGen Panels: The InstaGen Solar PV system, featuring MCS-certified monocrystalline panels with Tigo optimisers and CCA/TAP modules, meets the criteria for the 25% partial uplift Innovation Measure. The panels are compatible with both InstaGen’s cost-effective battery and inverter range, as well as a variety of other brands. Learn more here.

SolShare by Allume: Exclusive to Midsummer, SolShare is the world’s only hardware for sharing rooftop solar to apartments from a single 3-phase inverter, rather than using several single-phase inverters to achieve the same result. SolShare has been classified as an Innovation Measure of substantial uplift, enabling a 45% project score uplift. It’s a pretty cool bit of kit, check it out here.

Homely: Just recently, Homely, the smart controller that optimisers heat pumps, was approved as an ECO4 innovation measure. A game-changer for ECO4 installers. Homely achieved a 25% partial project score uplift, making it easier for projects to meet funding thresholds, whilst ensuring heat pumps run as efficiently and cheaply as possible. Learn more here.

Vaillant aroTHERM plus heat pumps: With exceptionally low GWP and great efficiencies at high temperatures, installers fitting Vaillant's aroTHERM can access a 45% Innovation Measure. This is the first heat pump to be awarded an innovation measure with a substantial uplift, making energy efficient solutions more accessible. Check out the range here.

• So-Eco
• UK Energy Support
• InterGlow
• Energy Saving Genie
• Ofgem
• Gov.uk
• Yes Energy Solutions
• Renewable Energy Installer
• Eco Anesco
• ECOGEN