Energy Company Obligation (ECO)

What is ECO4 Flex?

ECO4 Flex is a household referral mechanism within the wider ECO4 scheme which enables Local Authorities to widen the eligibility criteria for ECO, allowing them to tailor energy efficiency schemes to their respective area.  

The flexible approach to identifying eligible households exists to target low-income households who are unlikely to be in receipt of the scheme’s standard approach to fulfilling eligibility. This approach is available for Local Authorities and Devolved Administrations under the ECO4 scheme.

Under ECO4 Flex, a participating Local Authority can refer private tenure households that it considers to be living in fuel poverty or on a low income and vulnerable to the effects of living in a cold home. While ECO4 Flex is optional, suppliers can deliver up to 50% of their ECO obligation under this mechanism.

The role of local authorities

Local authorities can sign up to participate in ECO4 Flex to identify eligible households. To participate they will need to publish a Statement of Intent (SoI) which outlines their intention to participate in the scheme and follow the scheme rules. Local Authorities are responsible for determining whether households are eligible and will also need to produce declarations for all households they identify. They can also identify households in their area and for other areas where they have been given delegated authority from another Local Authority.

The role of devolved administrations

The Local Authorities in Wales and Scotland, as well as the Welsh and Scottish governments, are all able to make household referrals for ECO4 Flex. Where Local Authorities and governments in Scotland and Wales refer households for the scheme, they must issue a SoI and a declaration. The auditing and governance sections of this guidance will only apply to Local Authorities in devolved areas who refer households independently from their Devolved Administration.

The role of suppliers

Suppliers can also use their own energy debt data to identify and refer eligible households through ECO4 Flex or work with relevant authorities under the scheme. Where suppliers self-refer an eligible ECO4 Flex household, they must produce details of this on their project notification. Local Authorities and Devolved Administrations should be aware that a supplier must provide information to Ofgem on projects delivered under the scheme and as such the supplier will require information from the Local Authorities and Devolved Administrations to support this. Suppliers, installers, and Local Authorities and Devolved Administrations are free to and encouraged to establish their own working relationships. 

Auditing

Suppliers and Local Authorities will need to collect sufficient evidence from all ECO4 Flex measures to ensure that they meet the eligibility and compliance requirements of the scheme. 

Ofgem intends that audits will be a random sample but may need to include specific Local Authorities where they have been made aware that the Local Authority have not been following guidance. If a Local Authority is being investigated having failed an audit, measures will be rejected during this time.

Guidance and resources

Please follow the links at the bottom of this page for the  ECO4 Guidance for Local Authorities, as well as template forms for local authorities’ administration of the scheme and for third party referrals. The forms have been combined for Great British Insulation Scheme and ECO4 Flex.

To keep up to date on the ECO4 scheme you can subscribe to receive our latest news and communications.