A consultation on Energy Company Obligation 4 (ECO4) and the Great British Insulation Scheme (GBIS) is expected to be published next month, featuring a number of key proposals including Pay for Performance (PfP).

What is ECO4?

The Energy Company Obligation (ECO) Scheme is a government energy efficiency scheme that provides funding to low-income, fuel-poor and vulnerable households to heat their homes. The latest iteration, ECO4, launched in 2022 and will run until 31st March 2026.

ECO4 targets the least energy efficient homes in the UK, specifically those that have an Energy Performance Certificate (EPC) of D or lower. Through the scheme, these homes could receive heavily discounted or free home insulation, green heating systems or an upgraded boiler.

What is GBIS?

The Great British Insulation Scheme (GBIS) supports the worst performing households across Great Britain to make energy efficiency improvements. This includes low-income and vulnerable households, as well as those living in homes with an EPC rating of D or below and in Council Tax bands A-D in England, and A-E in Scotland and Wales.

The scheme works by obligating energy suppliers to help customers reduce their heating bills through the installation of energy efficiency measures, with the cost of the measures partially or fully subsidised.

What will the consultation cover?

The Department for Energy Security and Net Zero (DESNZ) has confirmed that a consultation on ECO4 and GBIS will be published shortly, likely in early November.

The consultation will be open for four weeks and is expected to cover the following proposals:

Pay for Performance on ECO4 and GBIS: a new feature that will measure and reward actual improvements to the energy efficiency of a treated home using Smart Meter Enabled Thermal Efficiency Ratings (SMETERs).
Updated legislation: Update ECO4 and GBIS legislation for PAS 2035/2030 to align with the latest 2023 version.
GBIS Targets: Allowing a proportion of delivery under ECO4 rules to count towards a supplier’s GBIS targets.
Loft and Cavity Wall Insulation: Allowing installation of loft and cavity wall insulation in the same property for GBIS.
Smart Thermostats: Allowing installation of smart thermostats alongside insulation in the low-income group for GBIS.
TrustMark Licence Plus: TrustMark Licence Plus for GBIS for loft insulation when delivered as a single measure and heating controls when paired with loft insulation.
Other minor amendments: Addition amendments including updating datasets used to identify homes in rural areas, tightening the off-gas heating hierarchy on ECO4, updating the qualifications required for insulation extraction on ECO4 and options to further incentivise smart meter uptake.

Elmhurst will keep members informed of any further updates relating to the consultation and will publish a summary once it is live.

What is Pay for Performance (PfP)?

Likely to be proposed for ECO4, Pay for Performance is a new feature that will introduce SMETER technology, utilising smart meter data into the incentive structure of the scheme.

For a dwelling to be eligible, it is likely that it must meet certain requirements, such as specific age bands, minimum floor area or defined architype. However, these requirements are yet to be confirmed.

Pay for Performance measures and rewards actual improvements in a property’s energy efficiency after energy saving measures are implemented. This measurement is completed using Heat Transfer Coefficient (HTC), which provides an indication of the true performance of the building that can be directly compared with the predicted performance.

How does this affect Retrofit professionals?

Measuring the actual performance of a building offers several key benefits, such as demonstrating the successful outcomes of a retrofit project and ensuring compliance with funding and regulatory requirements.

While the details of ECO4 Pay for Performance are still pending within the consultation, a solid understanding of Pay for Performance and Heat Transfer Coefficient will be essential for Retrofit professionals.

To stay ahead of these developments, take a look at Elmhurst’s Measured Energy Performance (MEP) training and competency scheme which centres around Heat Transfer Coefficient (HTC).

Measured Energy Performance Training

With a focus on Smart Heat Transfer Coefficient (HTC), the MEP training course will equip you with the skills and knowledge required to measure the actual performance of a building and compare it against design intent.

Click the button below for more information.

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Measured Energy Performance (MEP) Scheme

Further Resources:

For more information on the following areas, click the links below:

Great British Insulation Scheme (GBIS): https://www.gov.uk/apply-great-british-insulation-scheme
Energy Company Obligation (ECO): https://www.gov.uk/energy-company-obligation
Current government funding schemes and grants for homeowners: https://www.elmhurstenergy.co.uk/information-for-homeowners/funding-for-homeowners/

Consultation on ECO4 and GBIS expected next month