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The Electricity and Gas (Energy Company Obligation) Order 2022

Type Statutory-Instrument

Publication 2022-07-26

Last updated 2026-03-26

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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“BH” is the amount determined in accordance with article 56 (addition to annual cost savings for projects including basic heating repair or replacement measures);

“ESH” is the amount determined in accordance with article 57 (addition to annual cost savings for projects including repairs and replacements of efficient electric storage heaters);

“IMP” is the “project innovation uplift” and is the amount determined in accordance with article 58 (addition to annual cost savings for projects that include certain innovation measures);

“BFR” is the “building fabric repair increase” and is the amount determined in accordance with article 61 (addition to annual cost savings for certain projects incurring building fabric repair expenditure);

“L” is— the amount determined in accordance with article 64 (late completion penalty), where the ECO4 project consists of one or more qualifying actions which are not completed on time within the meaning of article 65(2); otherwise, £0.

Addition to annual cost savings for projects including basic heating repair or replacement measures

56

(1) This article applies for the purpose of determining the value of “BH” in the formula in article 55(2).

(2) Where the ECO4 project includes one or more basic heating repair or replacement measures, “BH” is the sum of the determined cost savings for those measures.

(3) Where the ECO4 project does not include any basic heating repair or replacement measures, “BH” is £0.

Addition to annual cost savings for projects including repairs and replacements of efficient electric storage heaters

57

(1) This article applies for the purpose of determining the value of “ESH” in the formula in article 55(2).

(2) Where the ECO4 project includes one or more qualifying actions specified in paragraph (4), “ESH” is the sum of the determined cost savings for those qualifying actions.

(3) Where the ECO4 project does not include any qualifying actions specified in paragraph (4), “ESH” is £0.

(4) The qualifying actions specified in this paragraph are—

(a) the repair of an efficient electric storage heater; or

(b) the replacement of an efficient electric storage heater with another efficient electric storage heater.

Project innovation uplift

58

(1) This article applies for the purpose of determining the amount of the project innovation uplift (“IMP”) in the formula in article 55(2).

(2) For the purposes of this article, where the ECO4 project includes a qualifying action which is an innovation measure, the Administrator must—

(a) determine, in accordance with article 59, whether the participant’s general innovation allowance is exhausted; and

(b) if the participant’s general innovation allowance is not exhausted, determine, in accordance with article 60, which of the qualifying actions in the ECO4 project (if any) are uplift eligible innovation measures.

(3) The project innovation uplift (“IMP”) is—

(a) £0, where—

(i) the ECO4 project does not include a qualifying action which is an innovation measure;

(ii) the participant’s general innovation allowance is exhausted; or

(iii) none of the qualifying actions included in the ECO4 project is an uplift eligible innovation measure;

(b) in any other case, the sum of the innovation measure uplifts for each uplift eligible innovation measure which is a qualifying action forming part of the ECO4 project in question.

(4) The innovation measure uplift for an innovation measure is the amount calculated in accordance with the following formula—

KM x (R + S).

(5) In paragraph (4)—

“KM” is the determined cost savings for the innovation measure;

“R” is— 0.25, in the case of a standard innovation measure; 0.45, in the case of a substantial innovation measure;

“S” is— 0.05, where the innovation measure— is a standard innovation measure, other than an ECO3 innovation measure, and is promoted by the participant that successfully applied under article 33 for the approval of the measure as a standard innovation measure; or is a substantial innovation measure and is promoted by the participant that successfully applied under article 33 or 35 for approval of the measure as a substantial innovation measure; 0, in all other cases.

Determination whether general innovation allowance is exhausted

59

(1) This article applies for the purposes of article 58.

(2) A participant’s general innovation allowance is exhausted only if X is equal to or greater than the participant’s general innovation allowance, where “X” is the sum of—

(a) the determined cost savings for the uplift eligible innovation measures—

(i) which are qualifying actions forming part of ECO4 projects promoted by the participant; and

(ii) for which the Administrator has given a score under article 47(1)(b) before the ECO4 project in question;

(b) the determined cost savings for the uplift eligible innovation measures—

(i) which are qualifying actions promoted by the participant; and

(ii) for which the Administrator has given a score under article 47(1)(c)(i) or (ii) before the ECO4 project in question;

(i) which are qualifying actions promoted by the participant; and

(ii) for which the Administrator has given a score under article 47(1)(c)(iii) before the ECO4 project in question;

(d) the project innovation uplifts for the ECO4 projects—

(i) promoted by the participant; and

(ii) for which the Administrator has given a score under article 47(1)(b) before the ECO4 project in question;

(e) the innovation measure uplifts for the innovation measures—

(i) promoted by the participant; and

(ii) for which the Administrator has given a score under article 47(1)(c)(i) or (ii) before the ECO4 project in question.

Determination whether measures are uplift eligible innovation measures

60

(1) This article applies for the purposes of article 58 and 59.

(2) A measure is an uplift eligible innovation measure if it is an innovation measure and immediately before the Administrator gives a score under article 47(1)(b) or (c) to the innovation measure, or to the ECO4 project which includes the innovation measure, X is less than 5% of the participant’s total home-heating cost reduction obligation, where “X” is the sum of—

(a) the determined cost savings for the innovation measures which—

(i) are qualifying actions forming part of ECO4 projects promoted by the participant for which the Administrator has given a score under article 47(1)(b); and

(ii) are of the same innovation measure description as the innovation measure in question;

(b) the determined cost savings for the innovation measures which—

(i) are qualifying actions promoted by the participant for which the Administrator has given a score under article 47(1)(c); and

(ii) are of the same innovation measure description as the innovation measure in question;

(d) the innovation measure uplifts for the innovation measures—

(i) referred to in sub-paragraph (b); and

(ii) for which the Administrator has given a score under article 47(1)(c)(i) or (ii).

(3) In this article, “innovation measure description” means—

(a) in relation to an innovation measure other than an ECO3 innovation measure, the measure description published by the Administrator in respect of the innovation measure under article 36(1)(a);

(b) in relation to an ECO3 innovation measure, the measure description published by the Administrator in respect of the ECO3 innovation measure under article 21(4)(a) of the 2018 Order.

Building fabric repair increase for ECO4 projects

61

(1) This article applies for the purpose of determining the amount of the building fabric repair increase (“BFR”) in the formula in article 55(2).

(2) For the purposes of this article, the Administrator must—

(a) determine the amount of building fabric repair expenditure in connection with the ECO4 project in accordance with article 62; and

(b) if the amount of building fabric repair expenditure in connection with the ECO4 project is £50 or more, determine, in accordance with article 63, whether the participant’s building fabric repair allowance is exhausted.

(3) The building fabric repair increase (“BFR”) is—

(a) £0, where—

(i) the amount of building fabric repair expenditure in connection with the ECO4 project is less than £50; or

(ii) where the participant’s building fabric repair allowance is exhausted;

(b) in any other case, the amount calculated in accordance with the following formula⁵⁸—

Q / £17.83.

(4) In paragraph (3)(b), “Q” is—

(a) £125, where the building fabric repair expenditure is between £50 and £200 (both inclusive);

(b) £351, where the building fabric repair expenditure is between £201 and £500 (both inclusive);

(d) £1,251, where the building fabric repair expenditure is £1,001 or more.

Determination of building fabric repair expenditure

62

(1) The amount of building fabric repair expenditure in connection with an ECO4 project is the amount equal to the costs, rounded downwards to the nearest £1, that the Administrator is satisfied—

(a) have been reasonably incurred in carrying out any items of work to which paragraph (2) applies;

(b) are accurately recorded in the TrustMark Data Warehouse; and

(2) This paragraph applies to an item of work which—

(a) is carried out at premises that—

(i) are the same domestic premises as the ECO4 project;

(ii) are owner-occupied premises; and

(iii) have a pre-project SAP band of E, F or G;

(b) is—

(i) the repair of a construction defect, a structural defect or a leak;

(ii) the treatment of condensation or mould growth; or

(iii) the removal of asbestos;

(d) in the case of the extraction of cavity wall insulation or loft insulation—

(i) is recommended in a report by a chartered surveyor pursuant to an assessment of the domestic premises performed for the purpose of assessing the condition of the insulation and related building fabric; and

(ii) is not carried out during the original term of any guarantee accompanying the installation of the insulation (whether or not that guarantee remains in effect throughout the original term);

(e) is required by PAS 2030:2023 or PAS 2035:2023 to be carried out before an ECO4 eligible measure in the ECO4 project is completed;

(f) is carried out in accordance with PAS 2030:2023 and PAS 2035:2023;

(g) is carried out during the course of the ECO4 project;

(h) is promoted by the same participant as promoted the ECO4 project; and

(i) is recorded in information held on the TrustMark Data Warehouse, together with a record of the actual cost incurred in carrying out the item of work.

(3) The related items of work listed in this paragraph are—

(a) the assessment of the domestic premises for the purpose of identifying measures for improving the energy efficiency of the premises;

(b) the relaying of carpets or tiles;

(d) the repainting of damaged surfaces;

(e) the installation of flood mitigation measures;

(f) the installation of ventilation measures.

Determination whether building fabric repair allowance is exhausted

63

(1) This article applies for the purposes of article 61.

(2) A participant’s building fabric repair allowance is exhausted only if X is equal to or greater than the participant’s building fabric repair allowance, where “X” is the sum of—

(a) the building fabric repair increases for the ECO4 projects promoted by the participant for which the Administrator has given a score under article 47(1)(b) before the ECO4 project in question;

(b) the building fabric repair increases for the qualifying actions promoted by the participant for which the Administrator has given a score under article 47(1)(c)(i) before the ECO4 project in question.

Penalty for late completion of qualifying actions

64

(1) This article applies for the purpose of determining the value of “L” in the formula in article 55(2) where the ECO4 project consists of one or more qualifying actions which are not completed on time within the meaning of article 65(2).

(2) The value of “L” is—

(a) if the ECO4 project consists of one qualifying action which is not completed on time, the late completion penalty for that qualifying action;

(b) otherwise, the sum of the late completion penalties for each of the qualifying actions in the ECO4 project which is not completed on time.

(3) For the purposes of paragraph (2), the late completion penalty for a qualifying action in the project which is not completed on time is calculated in accordance with the following formula—

KM x 0.2.

(4) In paragraph (3), “KM” is the determined cost savings for the qualifying action.

Time frame for completion of qualifying actions

65

(1) This article applies for the purpose of determining whether a qualifying action in an ECO4 project is completed on time.

(2) A qualifying action in an ECO4 project is completed on time if—

(a) it is the only qualifying action in the ECO4 project; or

(b) where it is part of an ECO4 project which includes more than one qualifying action—

(i) it is the first qualifying action in the project to be completed;

(ii) it is completed on the same day as, or not more than three months after, the day on which the first qualifying action in the project is completed; or

(iii) following an application under paragraph (3) which has been accepted by the Administrator, it is completed within the period specified by the Administrator under paragraph (6)(a).

(3) A participant may apply to the Administrator in writing for an extension of time in which to complete a measure in an ECO4 project.

(4) An application under paragraph (3) must be made before the end of the five month period beginning with the day on which the first measure in the ECO4 project is completed.

(5) An application under paragraph (3) must include—

(a) details of why the participant is seeking an extension of time to complete the measure; and

(b) such other information relating to the measure or the ECO4 project as the Administrator may require.

(6) Following receipt of an application under paragraph (3), the Administrator must—

(a) accept the application and specify a period within which the measure must be completed, as it thinks fit, but ending not more than six months after the day on which the first qualifying action in the ECO4 project is completed; or

(b) reject the application.

(7) In relation to an ECO4 project which includes an ECO4 eligible measure which is the installation of a district heating connection—

(a) the reference to “three months” in paragraph (2)(b)(ii) is to be read as a reference to “six months”;

(b) the reference to “five month period” in paragraph (4) is to be read as a reference to “eight month period”; and

CHAPTER 4 — Calculating partial project scores

66

In this Chapter—

“BFR” is “the building fabric repair increase” and is the amount determined in accordance with article 74 (addition to the annual cost savings for certain qualifying actions incurring building fabric repair expenditure);

“C” is— 1.1, where the qualifying action meets the condition in article 21 (measures accompanied by a declaration from a relevant authority or participant and Secretary of State approval); otherwise, 1;

“D” is 0.8 (being a deflator for a partial project score);

“F” is— 0.2, where the floor area of the domestic premises is less than 73m²; 0.1, where the floor area of the premises is between 73m² and 97m² (both inclusive); and 0, where the floor area of the premises is greater than 97m²;

“IM” is the amount determined in accordance with article 73 (addition to the annual cost savings for certain innovation measures);

“KM” is the determined cost savings for the qualifying action in question;

“OGR” is— 0.35, where the domestic premises are— off-gas premises; and in a rural area in Scotland or Wales; otherwise, 0.

Partial project score for basic heating repair or replacement measures: calculation

67

(1) This article applies for the purpose of calculating the partial project score to be given to a qualifying action which—

(a) is part of an ECO4 project that does not meet the requirements of article 49; and

(b) is a basic heating repair or replacement measure.

(2) The Administrator must determine the amount of annual cost savings for the qualifying action in accordance with paragraph (3).

(3) The amount of annual cost savings for the qualifying action is—

(a) £0, where—

(i) the heating measure limit in paragraph (4) applies to the qualifying action;

(ii) the participant’s heating repair allowance is exhausted, and the qualifying action is the repair of—

(aa) an efficient boiler; or

(bb) equipment for the generation of heat wholly or partly from biofuel, oil or liquefied petroleum gas; or

(iii) the participant’s heating replacement allowance is exhausted, and the qualifying action is the replacement of—

(aa) an efficient boiler with another efficient boiler; or

(bb) an efficient heating system with another efficient heating system of the same kind, other than where the efficient heating system being replaced is a district heating connection or a renewable heating system;

(b) £140 x (1 + F), in any other case.

(4) The heating measure limit in this paragraph applies to a qualifying action if before the Administrator determines the amount of annual cost savings for the qualifying action—

(a) another basic heating repair or replacement measure forming part of the same ECO4 project as the qualifying action in question has had its annual cost savings determined by the Administrator in accordance with paragraph (3); and

(b) the amount of annual cost savings for that other basic heating repair or replacement measure was determined to be at least £140.

(5) For the purpose of paragraph (3)(a), the Administrator must determine, in accordance with article 69, whether the participant’s heating repair allowance or heating replacement allowance is exhausted.

(6) Where the determined cost savings for the qualifying action is at least £140, the partial project score for the qualifying action is the result of the following formula—

(KM x C + IM + BFR) x D.

(7) Where the determined cost savings for the qualifying action is £0, the partial project score for the qualifying action is £0.

Partial project score for repairs and replacements of certain electric storage heaters

68

(1) This article applies for the purpose of calculating the partial project score to be given to a qualifying action which—

(a) is part of an ECO4 project that does not meet the requirements of article 49; and

(b) is—

(i) the repair of an efficient electric storage heater; or

(ii) the replacement of an efficient electric storage heater with another efficient electric storage heater.

(2) The Administrator must determine the amount of annual cost savings for the qualifying action in accordance with paragraph (3).

(3) The amount of annual cost savings for the qualifying action is—

(a) £0, where—

(i) the participant’s heating repair allowance is exhausted, and the qualifying action is the repair of an efficient electric storage heater; or

(ii) the participant’s heating replacement allowance is exhausted, and the qualifying action is the replacement of an efficient electric storage heater with another efficient electric storage heater;

(b) £40 x (1 + F), in any other case.

(4) For the purpose of paragraph (3)(a), the Administrator must determine, in accordance with article 69, whether the participant’s heating repair allowance or heating replacement allowance is exhausted.

(5) Where the determined cost savings for the qualifying action is at least £40, the partial project score for the qualifying action is the result of the following formula—

(KM x C + IM + BFR) x D.

(6) Where the determined cost savings for the qualifying action is £0, the partial project score for the qualifying action is £0.

Determination whether the heating repair or heating replacement allowance is exhausted

69

(1) This article applies for the purposes of articles 67 and 68.

(2) A participant’s heating repair allowance is exhausted unless X is less than the participant’s heating repair allowance, where “X” is the sum of—

(a) the number of ECO4 projects promoted by the participant—

(i) which include a capped heating repair measure; and

(ii) for which the Administrator has given a positive score under article 47(1)(b) before the qualifying action in question;

(b) the number of ECO4 projects promoted by the participant which include a qualifying action—

(i) which is a capped heating repair measure; and

(ii) for which the Administrator has given a positive score under article 47(1)(c)(i) before the qualifying action in question;

(i) which are capped heating repair measures; and

(ii) for which the Administrator has given a positive score under article 47(1)(c)(iii) before the qualifying action in question.

(3) A participant’s heating replacement allowance is exhausted unless Y is less than the participant’s heating replacement allowance, where “Y” is the sum of—

(a) the number of ECO4 projects promoted by the participant—

(i) which include a capped heating replacement measure; and

(ii) for which the Administrator has given a positive score under article 47(1)(b) before the qualifying action in question;

(b) the number of ECO4 projects promoted by the participant which include a qualifying action—

(i) which is a capped heating replacement measure; and

(ii) for which the Administrator has given a positive score under article 47(1)(c)(i) before the qualifying action in question;

(i) which are capped heating replacement measures; and

(ii) for which the Administrator has given a positive score under article 47(1)(c)(iii) before the qualifying action in question.

Partial project score for district heating connections

70

(1) This article applies for the purpose of calculating the partial project score to be given to a qualifying action which—

(a) is part of an ECO4 project that does not meet the requirements of article 49;

(b) is a district heating connection;

(d) is not a repair.

(2) Where this article applies, the score is calculated in accordance with the following formula—

(KM x (C + OGR) + BFR) x D.

(3) For the purpose of determining the annual cost savings achieved by a district heating connection (“the relevant connection”), a participant may apply to the Administrator in writing for approval of a methodology other than the Standard Assessment Procedure or the Reduced Data Standard Assessment Procedure (an “alternative methodology”).

(4) An application under paragraph (3) must be made—

(a) in the case of a district heating connection installed before the commencement date, before the measure is notified to the Administrator under article 43;

(b) in any other case, before the relevant connection is installed.

(5) The Administrator may approve an alternative methodology if—

(a) it is satisfied that—

(i) neither the Standard Assessment Procedure nor the Reduced Data Standard Assessment Procedure contain an appropriate methodology for determining the annual cost savings achieved by the relevant connection; and

(ii) the alternative methodology is an appropriate methodology for determining the annual cost savings achieved by the relevant connection; or

(b) the alternative methodology is published by, or on behalf of, the Secretary of State as a replacement for the Standard Assessment Procedure or the Reduced Data Standard Assessment Procedure.

(6) In this article, “the Standard Assessment Procedure” means—

(a) SAP2012, and

(b) SAP10.2.

Partial project score for data light measures and standard alternative methodology measures

71

(1) This article applies for the purpose of calculating the partial project score to be given to a qualifying action which—

(a) is part of an ECO4 project that does not meet the requirements of article 49;

(b) is either—

(i) a data light measure; or

(ii) a standard alternative methodology measure; and

(i) the replacement of an efficient boiler with another efficient boiler; or

(ii) the replacement of an efficient heating system with another efficient heating system of the same kind.

(2) Where the qualifying action to which this article applies is a standard alternative methodology measure, the partial project score is calculated in accordance with the following formula—

(KM x (C + OGR) + IM + BFR) x D.

(3) Where the qualifying action to which this article applies is a data light measure which is within the participant’s data light measure allowance, the partial project score is calculated in accordance with the formula in paragraph (2).

(4) Where the qualifying action to which this article applies is a data light measure which is not within the participant’s data light measure allowance, the partial project score is £0.

(5) For the purposes of this article, a data light measure is only within a participant’s data light measure allowance if X is less than the participant’s total data light measure allowance, where “X” is the sum of—

(a) the number of data light measures which are—

(i) qualifying actions forming part of an ECO4 project promoted by the participant for which the Administrator has given a positive score under article 47(1)(b) before the data light measure in question; and

(ii) of the same data light measure description as the data light measure in question;

(b) the number of data light measures which are—

(i) qualifying actions promoted by the participant for which the Administrator has given a positive score under article 47(1)(c)(i) or (ii) before the data light measure in question; and

(ii) of the same data light measure description as the data light measure in question.

Partial project score for other qualifying actions in an ECO4 project

72

(1) This article applies for the purpose of calculating the partial project score to be given to a qualifying action which—

(a) is part of an ECO4 project that does not meet the requirements of article 49; and

(b) is not a qualifying action to which one of articles 67 to 71 applies.

(2) Where this article applies, the partial project score is calculated in accordance with the following formula—

(KM x (C + OGR) + IM + BFR) x D.

Partial project scores: innovation measure uplift

73

(1) This article applies for the purpose of determining the value of “IM” in the formulae in this Chapter for calculating the partial project score to be given to a qualifying action.

(2) Where the qualifying action is an innovation measure, the Administrator must—

(a) determine, in accordance with paragraph (4), whether the participant’s general innovation allowance is exhausted; and

(b) if the participant’s general innovation allowance is not exhausted, determine, in accordance with paragraph (5), whether the qualifying action is an uplift eligible innovation measure.

(3) “IM” is—

(a) £0, where—

(i) the qualifying action is not an innovation measure;

(ii) the participant’s general innovation allowance is exhausted; or

(iii) the qualifying action is not an uplift eligible innovation measure;

(b) in any other case, the amount calculated as the innovation measure uplift for the innovation measure (see article 58(4)).

(4) Article 59 (determination whether general innovation allowance is exhausted) applies for the purposes of this article as it applies for the purposes of article 58, except that in article 59, for references to “the ECO4 project in question” substitute “the qualifying action in question”.

(5) Article 60 (determination whether a measure is an uplift eligible innovation measure) applies for the purposes of this article as it applies for the purposes of articles 58 and 59.

Partial project scores: building fabric repair increase

74

(1) This article applies for the purpose of determining the amount of the building fabric repair increase (“BFR”) in the formulae in this Chapter for calculating the partial project score to be given to a qualifying action.

(2) For the purposes of this article, the Administrator must—

(a) determine the amount of building fabric repair expenditure in connection with the qualifying action in accordance with paragraphs (3) and (4); and

(b) if the amount of building fabric repair expenditure in connection with the qualifying action is £50 or more, determine, in accordance with paragraph (7), whether the participant’s building fabric repair allowance is exhausted.

(3) Where the qualifying action is—

(a) the only qualifying action in the ECO4 project; or

(b) the final qualifying action in the project to have been completed,

the amount of building fabric repair expenditure in connection with the qualifying action is the amount determined in connection with the ECO4 project in accordance with article 62.

(4) Where the qualifying action is not—

(a) the only qualifying action in the ECO4 project; or

(b) the final qualifying action in the project to have been completed,

the amount of building fabric repair expenditure in connection with the qualifying action is £0.

(5) The building fabric repair increase (“BFR”) is—

(a) £0, where—

(i) the amount of building fabric repair expenditure in connection with the qualifying action is less than £50; or

(ii) where the participant’s building fabric repair allowance is exhausted;

(b) in any other case, the amount calculated in accordance with the following formula—

Q / £17.83.

(6) In paragraph (5)(b), “Q” has the same meaning as in article 61(4).

(7) Article 63 (determination whether building fabric repair allowance is exhausted) applies for the purposes of this article as it applies for the purposes of article 61, except that in article 63, for references to “the ECO4 project in question” substitute “the qualifying action in question”.

Publication of annual cost savings methodology: data light measures and standard alternative methodology measures

75

(1) The Administrator must publish, on its website, a methodology for the purpose of determining the annual cost savings of each data light measure and each standard alternative methodology measure.

(2) Under the methodology published by the Administrator—

(a) the initial determination of the annual cost savings must be based on—

(i) the pre-project SAP rating; and

(ii) the methodology stated in accordance with article 38(2)(a)(iii) in the application for the data light measure or standard alternative methodology measure that was approved by the Administrator in accordance with article 39 or 40;

(b) the result of the initial determination referred to in sub-paragraph (a) must be reduced by 10% in order to calculate the adjusted cost savings; and

AKM + (IKM x F).

(3) In paragraph (2)(c)—

“AKM” is the adjusted cost savings calculated in accordance with paragraph (2)(b);

“IKM” is the initial determination of the annual cost savings referred to in paragraph (2)(a).

Publication of annual cost savings methodology: other qualifying actions

76

(1) The Administrator must publish, on its website, a methodology for the purpose of determining the annual cost savings of a qualifying action other than a data light measure, a standard alternative methodology measure, a basic heating repair or replacement measure or a qualifying action referred to in article 68(1)(b).

(2) Under the methodology published by the Administrator—

(a) the initial determination of the annual cost savings must—

(i) be based on—

(aa) the pre-project SAP rating; and

(bb) the impact the qualifying action would have on the SAP rating of the domestic premises; and

(ii) where the qualifying action is the installation of cavity wall insulation or loft insulation, which forms part of an ECO4 project which includes an item of work—

(aa) to which article 62(2) applies; and

(bb) which is the extraction of cavity wall insulation or loft insulation,

take into account any impact that work would have on the SAP rating of the domestic premises as compared to the pre-project SAP rating;

(b) the result of the initial determination referred to in sub-paragraph (a) must be reduced by 10 % in order to calculate the adjusted cost savings; and

AKM + (IKM x F).

(3) In paragraph (2)(c)—

“AKM” is the adjusted cost savings calculated in accordance with paragraph (2)(b);

“IKM” is the initial determination of the annual cost savings referred to in paragraph (2)(a).

(4) Before publishing a methodology under this article, the Administrator must have regard to the Standard Assessment Procedure and the Reduced Data Standard Assessment Procedure.

(5) On or after 31 July 2025, the Administrator may revise any methodology published under this article and must publish the revised methodology on its website.

(6) Any revised methodology published under this article by the Administrator for the purpose of determining the annual cost savings of a qualifying action pursuant to SAP10.2 is applicable only to measures that are completed on or after the date the methodology has been published.

CHAPTER 5 — In-fill measures

Score for in-fill measures

77

(1) This article applies for the purpose of calculating the score to be given to a qualifying action which is an in-fill measure.

(2) Where this article applies, the score is—

(a) £0, where the in-fill measure is a data light measure which is not within the participant’s data light measure allowance;

(b) in any other case, calculated in accordance with the following formula—

KM x (1 + OGR) + IM.

(3) In paragraph (2)(b), “KM”, “IM” and “OGR” have the same meanings as in Chapter 4 (see article 66).

(4) Article 71(5) applies for the purposes of this article as it applies for the purposes of that article (determination whether data light measure is within participant’s data light measure allowance).

CHAPTER 6 — Surplus actions and ECO3 interim delivery actions

Score for surplus action and ECO3 interim delivery actions

78

(1) This article applies for the purpose of calculating the score to be given to a qualifying action which is—

(a) a surplus action; or

(b) an ECO3 interim delivery action.

(2) Where this article applies, the score is equal to the annual cost savings of the qualifying action which are calculated in accordance with the following formula⁵⁹—

E x £0.31 / £17.83.

(3) In paragraph (2), “E” is the ECO3 cost savings for the qualifying action.

PART 11 — Exemptions

Exemptions

79

(1) This article applies for the purposes of the following provisions—

(a) article 24(4) (minimum insulation requirement for certain band D premises);

(b) article 25(4) (minimum insulation requirement for band E, F and G and other band D premises);

(d) article 50(3)(b) (ECO4 projects: minimum requirement for energy efficiency improvement).

(2) A measure attracts an exemption under this Part if its installation—

(a) is prevented due to—

(i) the location of the domestic premises in a conservation area; or

(ii) the impact that such installation would have on a listed building or protected species;

(b) would otherwise be unlawful; or

(i) local environmental conditions;

(ii) the fabric or structure of the premises; or

(iii) physical restrictions on access to the premises.

(3) In this article—

“conservation area” has the meaning given by—in the case of premises in England ..., section 91(1) of the Planning (Listed Buildings and Conservation Areas) Act 1990⁶⁰; in the case of premises in Wales, section 210 of the Historic Environment (Wales) Act 2023; in the case of premises in Scotland, section 81(1) of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997⁶¹;

“listed building” has the meaning given by—in the case of premises in England ..., section 1(5) of the Planning (Listed Buildings and Conservation Areas) Act 1990⁶²; in the case of premises in Wales, section 76 of the Historic Environment (Wales) Act 2023; in the case of premises in Scotland, section 1(4) of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997⁶³;

“protected species” means the species—listed in Schedules 1 and 5 to the Wildlife and Countryside Act 1981⁶⁴; ordefined as a European protected species in—in the case of premises in England and Wales, regulations 42 and 46 of the Conservation of Habitats and Species Regulations 2017⁶⁵;in the case of premises in Scotland, regulations 38 and 42 of the Conservation (Natural Habitats, &c) Regulations 1994⁶⁶.

PART 12 — Transfers

Transfer of measures

80

(1) A relevant supplier may apply to the Administrator with another relevant supplier for one or more measures which are promoted by the relevant supplier (“A”) to be treated as promoted by the other relevant supplier (“B”) (a “proposed transfer”).

(2) An application under paragraph (1) must—

(a) be made by A and B, in writing, on or before 31st March 2027;

(b) be made in respect only of measures which—

(i) have been notified to the Administrator in accordance with article 43(a) to (cb); or

(ii) are surplus actions;

(c) if the application is made in respect of a measure which is part of an ECO4 project, be made in respect of all the measures which are part of that project;

(d) if the application is made in respect of an in-fill measure or a primary measure with which an in-fill measure is linked, be made in respect of—

(i) the in-fill measure;

(ii) all of the primary measures with which the in-fill measure is linked; and

(iii) any other measures which are part of the same ECO4 project as any of the primary measures referred to in paragraph (ii); and

(e) include such information relating to the proposed transfer as the Administrator may require.

(3) The Administrator must reject the application if—

(a) the requirements in paragraph (2) are not met; or

(b) where A and B are not members of the same group, the Administrator considers that, if the application were approved, there is a significant risk that A would be unable to achieve its total home-heating cost reduction obligation, total solid wall minimum requirement or total EFG minimum requirement.

(4) If the Administrator decides to reject the application it must in writing—

(a) notify A of any reasons for that decision relating to A; and

(b) notify B of any reasons for that decision relating to B.

(5) If the Administrator approves the application—

(a) except for the purposes of articles 20(1)(b), 21(2)(b), 43(a) and 45(4), the following are treated as promoted by B and not A for the purposes of this Order—

(i) each measure in respect of which the application was made; and

(ii) if a measure referred to in paragraph (i) is part of an ECO4 project, the project and any item of work to which article 62(2) applies in relation to the project; and

(b) the Administrator must notify A and B in writing of the date on which the application was approved.

(6) For the purposes of this article—

“primary measure” has the same meaning as in—article 22(1), in relation to a flat in-fill measure;article 23(1), in relation to a house in-fill measure;

“relevant supplier” means—a participant; ora licence-holder on whom a home-heating cost reduction obligation was imposed under the 2018 Order.

Transfer of obligations

81

(1) A participant may apply to the Administrator with another participant for all or part of its total home-heating cost reduction obligation, total solid wall minimum requirement or total EFG minimum requirement to be transferred from the participant (“A”) to the other participant (“B”) (a “proposed transfer”).

(2) An application under paragraph (1) must—

(a) be made by A and B, in writing, on or before 30th September 2025;

(b) state in respect of which one of the following the application is being made (the “relevant obligation”)—

(i) a total home-heating cost reduction obligation;

(ii) a total solid wall minimum requirement; or

(iii) a total EFG minimum requirement;

(d) include such other information relating to the proposed transfer as the Administrator may require.

(3) The Administrator must reject the application if—

(a) the requirements in paragraph (2) are not met;

(b) the proposed transfer amount exceeds A’s relevant obligation;

(c) having regard to section 30O of the Gas Act 1986⁶⁷ and section 27O of the Electricity Act 1989⁶⁸ (maximum amount of penalty or compensation), the Administrator considers that, if the application were approved, there is a significant risk that it would adversely affect the Administrator’s ability to enforce the requirements placed on B under this Order; or

(d) where A and B are not members of the same group, the Administrator considers that, if the application were approved, there is a significant risk that B would be unable to achieve its total home-heating cost reduction obligation, total solid wall minimum requirement or total EFG minimum requirement.

(4) If the Administrator decides to reject the application, it must in writing—

(a) notify A of any reasons for that decision relating to A; and

(b) notify B of any reasons for that decision relating to B.

(5) If the Administrator approves the application—

(a) for the purposes of this Order, A’s relevant obligation is treated as reduced by the proposed transfer amount, and the Administrator must notify A in writing of—

(i) its reduced relevant obligation; and

(ii) the date on which the application was approved; and

(b) for the purposes of this Order, B’s relevant obligation is treated as increased by the proposed transfer amount, and the Administrator must notify B in writing of—

(i) its increased relevant obligation; and

(ii) the date on which the application was approved.

PART 13 — Information and Enforcement

Final determination and reporting

82

(1) The Administrator must determine whether a participant has—

(a) achieved its total home-heating cost reduction obligation;

(b) met its total solid wall minimum requirement; and

(2) The Administrator must notify the participant in writing of its determination under paragraph (1) before 1st July 2027.

(3) The Administrator must submit to the Secretary of State a report each month setting out the progress which participants have made towards achieving their total home-heating cost reduction obligation.

(4) The Administrator must submit—

(a) its first report under paragraph (3) in the month following the month in which the commencement date occurs; and

(b) its final report under paragraph (3) in January 2027.

(5) Before 1st July 2027, the Administrator must submit to the Secretary of State a report setting out whether participants achieved the overall home-heating cost reduction target.

Information from participants

83

The Administrator may require a participant—

(a) to provide it with such information, or information of such nature, as it may specify—

(i) about the participant’s proposals for complying with any requirement under this Order; or

(ii) relating to the cost to the participant of achieving its total home-heating cost reduction obligation; and

(b) to produce to it evidence, of such kind as it may specify, demonstrating that the participant is complying with, or has complied with, any requirement under this Order.

Declaration verification service

84

(1) The Administrator must—

(a) provide a means by which a relevant authority may provide it with information about a declaration they have made under any one of articles 17 to 19 or 21(1);

(b) maintain a record of that information; and

(c) following a request by a participant which is accompanied by a copy of a declaration purporting to be made by a relevant authority under any one of articles 17 to 19 or 21(1) (“the purported declaration”)—

(i) determine whether the purported declaration matches any declaration about which a record is maintained by the Administrator under sub-paragraph (b); and

(ii) inform the participant of the outcome of that determination.

(2) Paragraph (1)(c) does not apply to a request made on or after 1st April 2027.

Enforcement

85

A requirement placed on a participant under this Order is a relevant requirement for the purpose of Part 1 of the Electricity Act 1989 and Part 1 of the Gas Act 1986⁶⁹.

SCHEDULE 1 — Help to heat group eligibility

1

The benefits referred to in the definition of “help to heat group” in article 2 are—

(a) child benefit under Part 9 of the 1992 Act⁷⁰;

(b) child tax credit under section 8 of the Tax Credits Act 2002⁷¹;

(c) guarantee credit (and for this purpose “guarantee credit” is to be construed in accordance with sections 1 and 2 of the State Pension Credit Act 2002⁷²);

(d) housing benefit under Part 7 of the 1992 Act⁷³;

(e) income-based jobseeker’s allowance within the meaning of section 1 of the Jobseekers Act 1995⁷⁴;

(f) income-related allowance within the meaning of section 1 of the Welfare Reform Act 2007⁷⁵;

(g) income support under Part 7 of the 1992 Act⁷⁶;

(h) savings credit (and for this purpose “savings credit” is to be construed in accordance with sections 1 and 3 of the State Pension Credit Act 2002⁷⁷;

(i) universal credit under Part 1 of the Welfare Reform Act 2012⁷⁸;

(j) working tax credit under section 10 of the Tax Credits Act 2002⁷⁹.

2

The condition as to income in paragraph 3 is specified in relation to child benefit.

3

Where the person claiming child benefit is—

(a) a single claimant, the condition as to income is that the claimant’s annual income from all sources does not exceed the amount set out in the first row of the table in the column corresponding to the number of children or qualifying young persons for whom the claimant is responsible;

(b) a member of a couple, the condition as to income is that the couple’s combined annual income from all sources does not exceed the amount set out in the second row of the table in the column corresponding to the number of children or qualifying young persons for whom at least one member of the couple is responsible.

Type of claimant	Number of children or qualifying young persons	Number of children or qualifying young persons	Number of children or qualifying young persons	Number of children or qualifying young persons
Type of claimant	1	2	3	4 or more
Single claimant	£19,900	£24,800	£29,600	£34,500
Member of a couple	£27,500	£32,300	£37,200	£42,000

4

For the purposes of paragraph 3, whether a person is responsible for a child or qualifying young person is to be determined in accordance with Part 9 of the 1992 Act⁸⁰.

5

In this Schedule—

“1992 Act” means the Social Security Contributions and Benefits Act 1992⁸¹;

“child” and “qualifying young person” have the same meaning as in Part 9 of the 1992 Act⁸²;

“couple” means— two people who are married to, or civil partners of, each other and are members of the same household; or two people who are not married to, or civil partners of, each other but are living together as if they were a married couple or civil partners;

“single claimant” means a person who is not a member of a couple.

1

Domestic premises in England and Wales are “social housing” if the premises are let below the market rate and—

(a) the relevant interest in those premises is registered as belonging to a social landlord; or

(b) if no relevant interest in the premises has been registered, the premises are let by a social landlord other than under a lease granted pursuant to Part 5 of the Housing Act 1985⁸³.

2

Domestic premises in Scotland are “social housing” if the premises are let below the market rate and—

(a) the relevant interest in the premises is registered as belonging to a social landlord; or

(b) if no relevant interest in the premises has been registered, the premises are let by a social landlord other than under a lease granted pursuant to sections 61 to 84 of the Housing (Scotland) Act 1987⁸⁴, as modified by section 84A of that Act⁸⁵.

3

In this Schedule—

“relevant interest” means— in respect of premises in England and Wales— the freehold estate, unless the whole of the premises have been let under a registered lease; or the leasehold estate, unless the whole of the premises have been further let under a registered lease; in respect of premises in Scotland— the owner’s interest or right, unless the whole of the premises have been let under a registered lease; or the lessee’s interest under a lease, unless the whole of the premises have been further let under a registered lease;

“social landlord” means— in respect of premises in England— a local housing authority, within the meaning of section 1 of the Housing Act 1985⁸⁶; a housing association, within the meaning of section 5 of the Housing Act 1985⁸⁷; a housing trust, within the meaning of section 6 of the Housing Act 1985; or a charity, within the meaning of section 1 of the Charities Act 2011⁸⁸; in respect of premises in Scotland, a person so described in section 165 of the Housing (Scotland) Act 2010⁸⁹; in respect of premises in Wales— a local housing authority, within the meaning of section 1 of the Housing Act 1985; a housing association, within the meaning of section 5 of the Housing Act 1985; a housing trust, within the meaning of section 6 of the Housing Act 1985; a charity, within the meaning of section 1 of the Charities Act 2011; a person listed in section 80(1) of the Housing Act 1985⁹⁰; or a body registered as a social landlord under Chapter 1 of Part 1 of the Housing Act 1996⁹¹.

4

For the purposes of this Schedule—

(a) in respect of premises in England and Wales, a lease or relevant interest is registered if it is registered in the register of title maintained by Her Majesty’s Land Registry;

(b) in respect of premises in Scotland, a lease or relevant interest is registered if it is—

(i) registered in the Land Register of Scotland; or

(ii) recorded in the Register of Sasines.

Signed

Callanan — Parliamentary Under Secretary of State — Department for Business, Energy and Industrial Strategy — 21st July 2022

The Scottish Ministers consent to the making of this Order.

Patrick Harvie — A member of the Scottish Government — 26th July 2022

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

This Order applies in Great Britain. It establishes the Energy Company Obligation scheme for the period to 31st March 2026 for the promotion of measures for reducing the cost to individuals of heating their homes. The scheme is administered and enforced by the Gas and Electricity Markets Authority (the “Administrator”).

Part 1 contains introductory and interpretation provisions.

In Part 2—

(a) article 3 sets out the overall home-heating cost reduction target for the period from the commencement of the Order to 31st March 2026;

(b) article 4 sets out who must participate in the scheme. These are licensed electricity and gas suppliers that have more than a specified number of domestic customers at the end of any year between 2021 and 2024 (each being a “qualification year”), and that supply more than a specified amount of gas or electricity to domestic customers during that same year, or that are in a group that meets these thresholds;

(c) article 5 requires participants to notify the Administrator of their customer numbers and amounts of gas or electricity so supplied.

Part 3 sets out the process for the apportionment of the overall home-heating cost reduction target between participants. A participant’s share of the target is referred to as its total home-heating cost reduction obligation (its “obligation”). A participant’s obligation is determined in four phases, by reference to whether the participant is a participant in relation to the phase, and if so, by reference to the amount of gas or electricity supplied by the participant (or its group) in the qualification year preceding the start of the phase. Phase 1 is the period from the commencement of the Order to 31st March 2023. Phases 2 to 4 are each successive periods of 12 months.

Part 4 requires a participant to achieve its obligation by no later than 31st March 2026, and by promoting “qualifying actions”, which are defined in Part 5 (see article 11). It sets limits on the amount of a participant’s obligation that may be met by certain qualifying actions. It also requires a participant to promote “solid wall actions” at sufficient domestic premises to meet its total “solid wall minimum requirement”, and to promote sufficient qualifying actions at private domestic premises that have an energy efficiency rating of band E, F or G to meet its total “EFG minimum requirement”. The amount of a participant’s solid wall minimum and EFG minimum requirement is determined in four phases by the Administrator under article 6.

Part 5 contains provisions about qualifying actions—

(a) article 11 sets out different conditions to be met for a measure to be a qualifying action, depending on whether the measure forms part of an ECO4 project, is an in-fill measure, is an ECO3 interim delivery action or a surplus action. These terms are all defined in article 2;

(b) article 12 sets out general requirements for measures forming part of an ECO4 project or in-fill measures;

(c) articles 13 to 16 set out different conditions to be met for a measure to be a qualifying action, depending on whether the measure is installed at owner-occupied premises, private rented premises, social housing with an energy performance rating of band D or social housing with an energy performance rating of band E, F or G;

(d) articles 17 to 21 set out conditions that measures may meet to be a qualifying action, where a relevant authority or participant has made certain declarations;

(e) articles 22 and 23 set out conditions to be met for a measure to be an in-fill measure;

(f) articles 24 to 30 set out additional requirements relating to heating measures;

(g) article 31 sets out further requirements relating to installation standards, consumer protection and smart meter advice.

Part 6 contains provisions about applications for approval of a measure as a standard innovation measure or a substantial innovation measure.

Part 7 contains provisions about applications for approval of a measure as a data light measure or a standard alternative methodology measure. Where an application under Part 6 or Part 7 is approved, some of the provisions of the Order differ for these measures, including the rules for calculating the contribution the measure makes to a participant’s obligation.

Part 8 contains provisions about the notification of completed measures—

(a) except in the case of surplus actions, the requirements for a qualifying action include a requirement for the participant to notify the measure to the Administrator in accordance with article 43;

(b) the deadline for notification of the measure is set by, or determined under, article 44.

Part 9 contains provisions about surplus actions. A participant, or any other licence-holder on whom a home-heating cost reduction obligation was imposed under the Electricity and Gas (Energy Company Obligation) Order 2018 (S.I. 2018/1183) can apply for a measure promoted under that Order to be recognised as a “surplus action” if it is not required by the applicant to meet its obligations under that Order and meets the criteria in Part 9 of this Order. A measure recognised by the Administrator as a surplus action may contribute towards a participant’s obligation under this Order.

Part 10 contains provisions about scores—

(a) article 46 sets out definitions;

(b) article 47 requires the Administrator to give a score to each ECO4 project that meets the requirements of article 49 (such a score is known as a full project score). It also requires the Administrator to give a score to each qualifying action which is part of an ECO4 project that does not meet the requirements of article 49, and to each qualifying action which is an in-fill measure, ECO3 interim delivery action or surplus action. The score is the amount the ECO4 project or qualifying action contributes towards the achievement of a participant’s obligation;

(c) before giving any score, the Administrator must calculate various allowances for each participant in accordance with article 48. These allowances affect the calculation of the score for certain ECO4 projects and qualifying actions;

(d) articles 49 to 52 set out the requirements that an ECO4 project must meet in order to be given a full project score. This includes the minimum requirement for energy efficiency improvement in article 50;

(e) articles 53 to 65 contain provisions for calculating the full project score;

(f) articles 66 to 76 contain provisions for calculating the score to be given to a qualifying action in an ECO4 project that does not meet the requirements of article 49 (such a score is known as a partial project score);

(g) article 77 provides for the calculation of the score to be given to an in-fill measure;

(h) article 78 provides for the calculation of the score to be given to a surplus action or ECO3 interim delivery action.

Part 11 contains provision about the circumstances in which a measure attracts an exemption for the purposes of certain requirements of the Order.

Part 12 contains provisions about transfer of measures and obligations—

(a) relevant suppliers can apply to the Administrator under article 80 to transfer notified measures from one to another;

(b) participants can apply to the Administrator under article 81 to transfer all or part of a participant’s obligation, total solid wall minimum requirement or total EFG minimum requirement from one to another.

Part 13 contains provisions about information and enforcement—

(a) article 82 requires the Administrator to determine before 1st October 2026 whether a participant has achieved its obligation. The Administrator must also deliver monthly reports to the Secretary of State until April 2026, and a final report before 1st October 2026 setting out whether participants achieved the overall home-heating cost reduction target;

(b) article 83 enables the Administrator to require information and evidence from a participant regarding compliance with the requirements of this Order and the costs of achieving its obligation;

(c) article 84 requires the Administrator to check copies of purported declarations by relevant authorities with information provided by the relevant authorities, when requested to do so by a participant;

(d) article 85 provides that a requirement placed on a participant under this Order is a relevant requirement for the purposes of Part 1 of the Electricity Act 1989 and Part 1 of the Gas Act 1986.

A full impact assessment of the effect that this instrument will have on the costs of business and the public sector has been published and is available at www.legislation.gov.uk. Hard copies of the impact assessment can be obtained from the Energy Company Obligation Team, Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H 0ET.

Footnotes

1986 c. 44. Section 33BD was inserted by section 68 of the Energy Act 2011 (c. 16).

1989 c. 29. Section 41B was inserted by section 69 of the Energy Act 2011.

2000 c. 27. Section 103A was inserted by section 70 of the Energy Act 2011 and amended by section 60 of the Scotland Act 2016 (c. 11) and S.I. 2014/631 and 2022/34.

Notwithstanding section 33BDA of the Gas Act 1986 and section 41BA of the Electricity Act 1989, as inserted by section 59 of the Scotland Act 2016, the Secretary of State may, by virtue of section 33BDA(10) of the Gas Act 1986 and section 41BA(10) of the Electricity Act 1989, make provision under section 33BD of the Gas Act 1986 and section 41B of the Electricity Act 1989 for the purposes of obligations imposed under those sections in relation to Scotland, with the agreement of the Scottish Ministers.

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