The Energy Company Obligation (ECO) has been around since 2013 and is the UK  government scheme to reduce carbon emissions and tackle energy poverty.

The scheme also has goals of creating healthier homes and improving the overall health and well-being of those who live in them. The ECO has undergone a few different iterations, with the latest being ECO3, which is set to run through to 31 March 2022.

If you’re an electrical contractor that works on energy improvements to people’s homes, being part of ECO may be worthwhile. Here’s a little bit about what that involves and where we are now with ECO:

Free download: Get our PAS 2030 and PAS 2035 fact sheet here

ECO background

Since its inception in April 2013, the ECO has been updated a few times. It still holds to original goals of tackling energy poverty, although the most recent version (ECO3) removes the need to deliver against an additional obligation called the Carbon Emissions Reduction Obligation (CERO).

If you have been an ECO installer for a few years, then it’s important to know that any measures installed between 1 April 2015 and 31 March 2017, should comply with the ECO2 guidance and associated documents. Prior to that, measures need to be compliant with ECO1.

In the most recent update, ECO policy is entirely formed from one obligation, the Home Heating Cost Reduction Obligation (HHCRO). Under HHCRO, obligated suppliers must mainly promote measures which improve the ability of low income, fuel poor and vulnerable households to heat their homes. 

Energy company obligation

Registration required

ECO3 requires that any contractors operating in the ECO environment to complete energy improvements on people’s homes must be registered with TrustMark. They also must work under the requirements of TrustMark’s own Framework Operating Requirement (FOR). This is in effect from the beginning of 2020.

A further obligation is that any work completed must be recorded by notifying the TrustMark Data Warehouse on completion. The aim is to have a complete audit trail and to provide protections to the consumer.

Other compliance codes that you may need to be certified for include PAS 2030 (Energy Efficient Installer) and PAS 2035:2019 (Retrofitting Dwellings for Improved Energy Efficiency). PAS 2035 introduces specific roles including:

  • Retrofit Advisor
  • Retrofit Assessor
  • Retrofit Coordinator
  • Retrofit Designer
  • Retrofit Evaluator

The timeline for compliance is:

  • On and after January 1, 2020: Installers must be TrustMark registered; all measures must be entered into the TrustMark Data Warehouse and all FTCH changes come into force.
  • On and after July 1, 2020: All room-in-roof and underfloor insulation measures must be accompanied by a 25-year appropriate guarantee.
  • Up to and including June 30, 2021: Subject to transitional arrangements (and where applicable), installers must comply and be certified as compliant with either PAS 2030:2017 or PAS 2035:2019.*
  • On and after July 1 2021: Where applicable, installers must be certified as compliant with PAS 2030:2019 and comply with both PAS 2030:2019 and PAS 2035:2019.

*During this period all measures installed by suppliers who are certified as compliant with PAS 2030:2019 and who comply with PAS 2030:2019 and PAS 2035:2019 will receive a 20% score uplift.

Certifiers for the PAS standards can be found via TrustMark, such as Ocean Certification here.

A holistic approach

The latest iteration of ECO introduces Retrofit Assessors and Retrofit Coordinators as key roles for evaluating properties. It is hoped that this measure will result in a more holistic assessment of the entire property, rather than going ahead with piecemeal initiatives.

For example, the new PAS2035:2019 specifications encourage looking at the property as a whole. Taking this “whole house” approach is more efficient rather than patching symptoms. If you install more efficient, cleaner heating and thermostat control, it doesn’t make much sense to do so without looking at other heat conservation measures such as insulation. Electrical contractors working in this space may find themselves working in concert with other types of contractors, all with the overarching goal of improving heating and energy efficiency.

One driver behind the changes is findings from the Each Home Counts report. It was found that there were inefficiencies or failings in some areas of the supply chain and delivery of ECO initiatives. ECO3 brings new rigour to quality and technical standards, along with guarantees as to the longevity of the work completed.

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Toward greener energy

There is a developing market that is driven toward tackling climate issues, of which electrification plays a role. In relation to ECO3, sustainably derived electricity can replace older, fossil fuel-powered methods of heat generation in homes.  

It is estimated that the majority of ECO work will be in retrofitting current buildings, of which many are inefficient. By some estimates, we already have 80% of the homes built that will be lived in by 2050, indicating that retrofits will probably take up most ECO3 resources (there are some restrictions on what can be done and the numbers that can be done each year).

Energy company obligation

Why participate in ECO?

If you are not yet offering ECO fitouts and are considering becoming certified, it’s important to weigh the risks and benefits. A key criticism is that it’s costly to become certified, which may shut out a lot of smaller businesses. It’s also not compulsory for every council across the UK to participate, so you may find that your local council doesn’t.

ECO is also quite restrictive in terms of what it allows to be done. Some have criticised that ECO3 is the most restrictive iteration yet. Some measures have very little funding attached, which has meant the customer contribution will be quite high. As the scheme is targeted at those in fuel poverty, many of those customers are not in a position to pay extra for the installation.

Download our PAS 2030 and PAS 2035 fact sheet here

On the other hand, around 6.5 million UK households are considered eligible for ECO3 and the plan is to make energy-saving improvements to 900,000 homes by the end of the period. Suppliers must deliver 15% of their ECO measures to homes in rural areas, and 10% of them can be installing ‘innovative’ products, such as devices to help homeowners manage their energy use.

We know that ECO3 finishes in 2022, when it will be superseded by a new iteration. We don’t know the details of any changes to come, but we do know the Government estimates that around 24 million homes will need updating over the next 30 years. The opportunities for electrical contractors are a considerable slice of the pie.

How can you participate? Besides obtaining the certifications mentioned earlier, you can get in touch with suppliers (such as electricity companies) that are obligated to participate to find out how to become an installer for them. One example is Yes Energy Solutions, which has an installer network.

Are you now participating, or thinking of participating in ECO3 installations? Countfire can help you to count takeoffs quickly and efficiently. Try us out for free here.