ECO4 — the Energy Company Obligation, fourth phase — is the largest pot of energy efficiency funding currently available in the UK. It runs until March 2026 in its present form (the successor scheme, ECO5, is in consultation), and for landlords with D, E, F or G-rated properties it can be the difference between an upgrade that pays for itself and an upgrade that doesn't.
Despite the funding being substantial, take-up among private landlords has been modest. The most common reason: a misunderstanding of who is eligible. ECO4 is means-tested, but the means test sits on the tenant, not the landlord.
What ECO4 actually pays for
ECO4 is funded by the major energy suppliers under a government obligation. The scheme funds whole-house retrofits aimed at lifting properties to a defined target rating (typically a D for the worst-rated stock, a C for D-rated stock). Eligible measures include:
- Loft, cavity wall and solid wall insulation
- Underfloor and room-in-roof insulation
- First-time central heating installation
- Boiler upgrades (case-by-case)
- Air source heat pumps and renewable heating
- Solar PV (in limited circumstances, usually packaged with insulation)
- Heating controls (smart thermostats, TRVs)
The funding cap is around £7,500 per property, and in many cases the scheme covers 100% of the cost. Where it doesn't, the landlord typically pays a top-up contribution of 10-30%.
Who qualifies — the tenant test
This is the part that catches most landlords out. ECO4 eligibility is determined by the person living in the property, not the person who owns it. A property qualifies if the tenant household:
- Receives a means-tested benefit (Universal Credit, Pension Credit, Income Support, income-based JSA/ESA, Housing Benefit, Working Tax Credit on a low income), or
- Has been referred under the local authority's "LA Flex" route, which lets councils declare a wider group of low-income / vulnerable households eligible.
In practice, a meaningful slice of the private rented sector falls inside one of these groups. If you let to housing benefit tenants, working tenants on lower incomes, or older tenants on Pension Credit, your property is highly likely to qualify.
The property test
On top of the tenant qualifying, the property itself needs to be in scope:
- EPC rated D, E, F or G (A, B and C ratings cannot claim ECO4)
- Mainstream housing — not park homes, holiday lets or HMOs above a certain size
- England, Wales or Scotland (Northern Ireland has its own equivalent schemes)
Importantly, the lower the existing rating, the more measures the scheme will fund. A G-rated property may receive a fully funded retrofit running to over £15,000 of work; a D-rated property typically receives a more targeted package.
How the application actually works
You don't apply to "ECO4" as a single scheme. You apply to a specific energy supplier or, more often, to one of the registered installers who deliver the work on the supplier's behalf. The typical journey is:
- Find a local ECO4-registered installer (TrustMark / PAS 2035 accredited).
- They survey the property and verify tenant eligibility (with the tenant's consent).
- They scope the measures and confirm any landlord contribution required.
- You sign an agreement; the work is scheduled.
- After installation, a new EPC is lodged showing the upgraded rating.
Surveys are usually free. The whole process from initial contact to a fitted property commonly takes 8-12 weeks.
Common mistakes that get applications rejected
- Doing the work first, applying after. ECO4 only funds work that hasn't started. There is no retroactive claim.
- Not getting the tenant's data permission early. The benefit check requires the tenant to consent to a basic data check. Without it, eligibility cannot be verified.
- Mixing funded measures with non-funded ones. A funded heat pump install packaged with a non-funded conservatory build can cause issues; ring-fence the funded work.
- Choosing the cheapest installer. ECO4 work must be done under PAS 2035 standards. Sub-standard installs can void the funding and create remediation liability for the landlord.
What's next: ECO5
The successor scheme is in consultation and is expected to launch in late 2026 or early 2027. Early signals point to:
- A heavier focus on heat pumps and low-carbon heating
- Tighter PAS 2035 quality requirements
- Possible tightening of landlord eligibility criteria, especially for higher-income tenants
If you have an eligible property and an eligible tenant today, the practical advice is simple: don't wait for ECO5. The cheapest, easiest funded retrofits are happening now under ECO4 — start with a free EPC check and an installer survey.