The short answer: ECO4 is funded by large energy suppliers, not by the taxpayer. Under the Energy Company Obligation, Ofgem places a legal duty — the Home Heating Cost Reduction Obligation (HHCRO) — on medium and large energy suppliers to pay for energy-saving improvements in low-income, fuel-poor and vulnerable homes. Suppliers meet that obligation by funding installers to fit insulation and heating measures. Because the cost sits with the supplier, not the household, ECO4 work is free to eligible homes with nothing to repay — and you don't have to be a customer of the supplier that funds it.
Last verified: 18 July 2026 against Ofgem — Energy Company Obligation (ECO) and the Ofgem supplier-obligation thresholds.
ECO4 ends 31 December 2026: what you can get now
If you were looking at ECO4, these are the schemes you can apply to today, and the ones that keep running after it closes.
- Warm Homes: Local Grant (England) — insulation, heat pumps and solar panels for privately owned or privately rented homes rated EPC D–G, through councils taking part, if household income is £36,000 or less, someone gets a qualifying means-tested benefit, or you live in one of the most deprived postcodes. Owner-occupiers can have the work fully funded; tenants pay nothing, and a landlord gets one home fully funded, then pays 50% from the second. It runs to March 2028. Apply free on GOV.UK; your council usually contacts you within 10 working days. How it works.
- Boiler Upgrade Scheme (England & Wales) — £7,500 off an air source or ground source heat pump for most homeowners replacing fossil-fuel heating — no income or benefits test, and since 28 April 2026 no valid EPC needed. Homes heated by oil or LPG with no mains gas connection get £9,000 off an air source or ground source heat pump until 31 March 2027. The installer claims it and takes it off the quote; you pay the rest. Boiler Upgrade Scheme guide.
- In Scotland or Wales? — the Warm Homes: Local Grant is England only. In Scotland, Warmer Homes Scotland funds insulation and heating (Home Energy Scotland, 0808 808 2282); in Wales, Nest does the same for low-income households in homes rated EPC E or below (0808 808 2244).
- Warm Home Discount — £150 off your electricity bill for winter 2026/27. In England and Wales it is usually paid automatically if you got Universal Credit, Pension Credit, Housing Benefit or income-related ESA on 23 August 2026. Who qualifies.
- ECO4, while it lasts — ECO4 can still fund work where a local installer has capacity, but only until 31 December 2026, and the work has to be finished, not just booked. There are no new targets and no ECO5. What replaces ECO4.
Sources, checked 10 October 2026: GOV.UK Warm Homes: Local Grant, GOV.UK Boiler Upgrade Scheme, SI 2026/390, Ofgem ECO, HMRC VAT Notice 708/6, GOV.UK Warm Home Discount, Home Energy Scotland, gov.wales Nest.
Who funds ECO4?
ECO4 stands for the fourth phase of the Energy Company Obligation. It's the government's main scheme for improving the least energy-efficient homes, but it is not funded like a normal government grant. There is no pot of Treasury money and no cheque from your council. Instead, the government sets an overall energy-saving target and then obligates energy suppliers to deliver it — and to pay for it.
Ofgem, the energy regulator, administers the scheme by placing the Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers. Each obligated supplier is given a share of the target and must fund enough home upgrades to meet it. In practice, suppliers work with approved installers who survey eligible homes and fit the measures; the supplier pays for the work and reports it to Ofgem as evidence that it has met its obligation.
Which energy suppliers are obligated?
Not every supplier has to take part. A supplier becomes obligated once it passes Ofgem's size thresholds, so the duty falls on the larger domestic suppliers rather than the smallest niche ones. Ofgem publishes contact details for the suppliers obligated under the Energy Company Obligation. As verified on 18 July 2026, that list includes:
- British Gas
- E (Gas & Electricity) Ltd
- E.ON UK Solutions
- Ecotricity
- EDF
- Octopus Energy
- Outfox the Market
- OVO
- Scottish Power
- So Energy (including ESB Energy)
- The Utility Warehouse
- Utilita Energy Ltd
The obligated list is set by Ofgem and can change from year to year as suppliers grow, shrink or merge, so always treat the official Ofgem supplier list as the definitive version.
What makes a supplier obligated?
A gas or electricity supplier is drawn into the obligation once it reaches a set size. Under Ofgem's rules, a supplier is obligated if it has 150,000 or more domestic customers on 31 December before the relevant scheme year, and has supplied at least 700 GWh of gas or 300 GWh of electricity in the preceding calendar year. Suppliers below those thresholds are not obligated — which is why the funders are the household-name suppliers rather than every small challenger brand.
How the money reaches your home
Understanding the flow of money is the easiest way to see why ECO4 is genuinely free for eligible households:
| Step | What happens |
|---|---|
| 1. Obligation set | Ofgem gives each large supplier a share of the national energy-saving target. |
| 2. Supplier funds delivery | To meet its target, the supplier pays for measures to be installed in eligible homes. |
| 3. Installers do the work | Approved installers survey your home and fit insulation and heating measures, with TrustMark quality assurance. |
| 4. Evidence reported | The completed measure counts towards the supplier's obligation and is reported to Ofgem. |
| 5. You pay nothing | Because the supplier carries the cost of meeting its legal duty, the eligible household is not charged and has nothing to repay. |
This is also why funding is finite each year: once a supplier has delivered enough measures to meet its share of the target, the budget for that period is used up. It's a big reason we suggest eligible households apply sooner rather than later, especially in ECO4's final year.
What this means if you're applying
- It's free — with nothing to repay. Genuine ECO4 measures are funded by the obligated supplier, not lent to you. There is no loan and no bill added afterwards.
- You don't need to switch supplier. Eligibility is about your household and your home, not who sends your energy bill. You can benefit from a measure funded by a supplier you're not a customer of.
- Eligibility is separate from funding. Who pays (the supplier) is a different question from whether you qualify (your benefits, income or council's LA Flex criteria). See our full ECO4 scheme guide and check with the eligibility checker.
- No benefits? There's still a route. If you don't claim a qualifying benefit, your council may still refer you through LA Flex, the flexible-eligibility route into ECO4.
Because it's free, never pay upfront. The whole point of ECO4 is that the supplier funds the work. No legitimate installer will ask an eligible household to pay a fee to "release" or "guarantee" ECO4 funding. Be cautious with cold callers, insist on written confirmation that the work is fully funded, and check installers are TrustMark-registered (and MCS-certified for heat pumps or solar).
When does ECO4 end?
ECO4 applies to measures installed from 1 April 2022 and, following a nine-month extension, runs until 31 December 2026. No successor "ECO5" has been announced; future help is expected to come through the government's wider Warm Homes Plan, including the Warm Homes: Local Grant, which runs to March 2028. If you're eligible for ECO4 now, it's worth applying while the funding is still flowing.
There is no ECO5 — see what replaces ECO4 after 31 December 2026, including the Warm Homes: Local Grant, which runs to March 2028.
Common questions
Is ECO4 government-funded?
Not directly. ECO4 is administered by Ofgem but funded by obligated energy suppliers through the Home Heating Cost Reduction Obligation, rather than paid for out of general taxation.
Do I have to be a customer of an obligated supplier?
No. Any obligated supplier can fund a measure in your home regardless of who currently supplies your energy. Eligibility depends on your household and property, not your tariff.
Why is ECO4 free if a company is paying?
Suppliers are meeting a legal obligation set by government and administered by Ofgem. They carry the cost of the measures to satisfy that duty, so eligible households pay nothing and have nothing to repay.
How do I know a supplier or installer is genuine?
Check the installer is TrustMark-registered (and MCS-certified for heat pumps or solar), and cross-check obligated suppliers against Ofgem's official supplier contact list. Never pay a fee to unlock a "free" grant.