Energy Company Obligation 4

Thousands of low income households in Scotland are about to benefit from a new home insulation scheme. New eligibility criteria for the ECO free cavity wall insulation and loft insulation grant scheme is being finalised by the Government. Many properties that did not previously qualify will now qualify under new plans to extend the offer to parents who claim child benefit.

Heat loss in a house with no insulation
ECO 3 Insulation Grants Update 2018

The Government’s Energy Company Obligation scheme is about to enter Phase 3. The latest updates to the home energy efficiency program will be introduced in October 2018 and will run until March 2022. ECO 3 will focus on improving the energy efficiency of homes in Scotland and the UK by “supporting low income, vulnerable and fuel poor households,” (Government ECO Consultation).  The scheme is part of a drive to lower carbon dioxide emissions in millions of homes across Scotland, England and Wales by installing free cavity wall insulation, solid wall insulation, loft insulation and other energy saving measures.

The previous version of the energy scheme was a two pronged initiative aimed at helping two specific groups –

  • CERO – Larger “non gas” properties which are heated by alternative heating sources including electric storage heaters, coal, oil boilers and LPG. These types of properties were targeted due to the excessive carbon emmisions they released into the environment.
  • HHCRO – Low income households in a certain benefit group. Property restrictions were waived under this obligation as long as grant applicants met the benefit / income related criteria.

Changes to the Energy Company Obligation

Energy suppliers and insulation companies in Scotland are still waiting for final confirmation via parliament. Updates to ECO qualification should mean that thousands of homeowners and private tenants in Scotland who did not qualify for a grant under ECO 2 are set to reap the benefits of reduced heating costs under the new legislation.

The Government and insulation providers are currently waiting on confirmation detailing the benefits that will qualify for a grant. Early indications are that people who fall into the following categories will qualify for free wall insulation or loft insulation.

Insulation grant qualification criteria in Scotland

Under the new proposals the following groups will qualify for a non-repayable Government home insulation grant.

Eligible Benefits / Tax Credits

Recipients of the following benefits will be eligible under ECO3 and will not be
required to meet any further eligibility requirements:

  • Working Tax Credits
  • Child Tax Credits
  • Income Support
  • Income Based ESA
  • Income Based JSA
  • Pension Savings Credit
  • Pension Guarantee Credit
  • Housing Benefit
  • Warm Homes Discount
  • Universal Credit

Child Benefit

Those in receipt of Child Benefit will only be eligible if their household income is
below the following thresholds:

ECO EligibilityNumber of children <16 or <20 in Full Time Education
1234 or more
Single claimant£19,800£24,600£29,400£34,200
Member of a
Figures taken from

Why should I insulate my home?

Installing home insulation is considered to be the one of the most effective way of reducing energy costs in your home. If your outer walls and attic space are not insulated correctly the heat you generate inside your property escapes. This means you spend more than you have to to maintain a comfortable temperature in your rooms. Your heating has to be on for longer which means higher bills and more carbon emissions.

  • Cavity wall insulation prevents 35% of heat escaping through your walls
  • 25% of the heat you generate escapes through your attic space and roof
  • Home insulation reduces heating costs
  • Helps improve your carbon footprint by reducing harmful cO2 emissions
  • Installation of home insulation is completely free if you are eligible under the ECO scheme
  • Includes cost of home energy survey and installation

Apply for a heat pump or free insulation grant in Scotland >>