Home Heat Pump Guide

ECO4 Scheme and Heat Pumps: Free Installation for Eligible Households

The Energy Company Obligation (ECO4) scheme is one of the most significant — but least well-known — routes to getting a heat pump installed for free in the UK. Unlike the Boiler Upgrade Scheme, which provides a £7,500 discount, ECO4 can cover the entire cost of installation for qualifying households.

This guide explains what ECO4 is, who qualifies, how heat pumps fit into the scheme, and how to access free installation if you are eligible.

What Is the ECO4 Scheme?

ECO stands for Energy Company Obligation. It is a government programme that requires large energy suppliers to fund energy efficiency improvements in UK homes. The "4" indicates it is the fourth iteration of the scheme.

How ECO4 Works

  • Who funds it: Large energy suppliers (those with more than 150,000 domestic customers) are legally obligated to fund energy efficiency measures
  • Who benefits: Low-income and vulnerable households living in energy-inefficient homes
  • What it covers: A range of energy efficiency measures including heat pumps, insulation, and heating system upgrades
  • Cost to the homeowner: Nothing — measures are fully funded
  • Where it applies: England, Scotland, and Wales (not Northern Ireland)

The "Fabric First" Approach

ECO4 takes a "fabric first" approach, meaning the scheme prioritises improving the building envelope (insulation, draught-proofing) before installing new heating systems. This makes sense because a well-insulated home needs less heat and allows a smaller, more efficient heat pump to be installed.

In practice, this means an ECO4 installation might include:

  • Loft insulation or top-up
  • Cavity wall insulation
  • External wall insulation (for solid-wall properties)
  • Floor insulation
  • A heat pump to replace the existing heating system

The entire package can be funded through ECO4.

ECO4 Eligibility: Who Qualifies?

ECO4 is targeted at households most in need. Eligibility is based on a combination of the homeowner's financial circumstances and the property's energy efficiency rating.

Benefits-Based Eligibility

You are likely eligible if you receive any of the following means-tested benefits:

  • Universal Credit (with annual earned income below a set threshold)
  • Pension Credit (Guarantee Credit)
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker's Allowance (JSA)
  • Income Support
  • Child Tax Credits (with income below a set threshold)
  • Working Tax Credits (with income below a set threshold)
  • Housing Benefit

Property Requirements

  • The property must have an EPC rating of D, E, F, or G
  • The goal is to improve the property by at least two EPC bands (e.g., from E to C)
  • Both owner-occupied and privately rented properties are eligible
  • Social housing may also qualify through separate ECO4 routes

ECO4 Flex

ECO4 Flex allows local authorities to refer households that do not receive qualifying benefits but are still considered vulnerable or in fuel poverty. This widens the pool of eligible homeowners and can include people who:

  • Have a low income but do not receive means-tested benefits
  • Are vulnerable due to age, disability, or health conditions
  • Live in areas with high levels of fuel poverty
  • Are identified by their council as being at risk of fuel poverty

If you do not receive qualifying benefits but think you may be eligible, contact your local council to ask about ECO4 Flex referrals.

How Do Heat Pumps Fit Into ECO4?

Heat pumps are one of the eligible heating measures under ECO4. When a property qualifies and a heat pump is the most appropriate heating solution, ECO4 can fund:

  • The heat pump unit itself
  • Installation labour and materials
  • Any necessary pipework modifications
  • A hot water cylinder if needed
  • Electrical supply upgrades if required
  • Radiator upgrades if needed for the heat pump to work effectively

The entire heating system change can be covered, not just the heat pump unit.

When Is a Heat Pump Recommended Under ECO4?

ECO4 assessors will recommend a heat pump when:

  • The property has adequate insulation (or insulation is being installed as part of the package)
  • A heat pump is the most cost-effective way to improve the property's EPC rating
  • The property is suitable for a heat pump installation (space for the outdoor unit, adequate electrical supply)
  • The existing heating system is inefficient and needs replacing

Not every ECO4-eligible property will receive a heat pump. Some may receive insulation only, or a more efficient gas boiler if that makes more sense for the specific property.

How to Apply for ECO4

Unlike the BUS grant where you choose your installer and they apply, ECO4 works differently:

Route 1: Through Your Energy Supplier

  1. Contact your energy supplier and ask about ECO4 schemes
  2. They will check your eligibility based on benefits and property details
  3. If eligible, they will arrange an assessment of your property
  4. An assessor recommends appropriate measures
  5. Approved contractors carry out the work

Route 2: Through an ECO4 Installer

  1. Contact an ECO4-approved installer or scheme manager directly
  2. They check your eligibility and assess your property
  3. They arrange the funding through their partnership with an energy supplier
  4. The work is carried out at no cost to you

Route 3: Through Your Local Council (ECO4 Flex)

  1. Contact your local council's housing or energy team
  2. Ask about ECO4 Flex referrals
  3. The council assesses your eligibility and refers you to a scheme manager
  4. An assessment and installation are arranged

ECO4 vs the BUS Grant: Which Is Better?

If you qualify for both, here is how they compare:

  • ECO4: Can cover the full cost (£0 out of pocket). You do not choose your installer. Limited control over the system specification. May take longer.
  • BUS: £7,500 off, you pay the rest. You choose your installer. Full control over the system. Typically faster.

You cannot receive both ECO4 and the BUS grant for the same installation. If you are eligible for ECO4, the free installation is obviously more attractive financially. But if speed and choice of installer matter to you, the BUS grant gives you more control.

See our complete grants guide for a full comparison of all schemes.

What to Watch Out For

Quality of Installation

Because you do not choose your installer under ECO4, the quality of installation can vary. Look for:

  • MCS certification for the heat pump installer
  • A proper heat loss survey before installation
  • A correctly sized heat pump for your property
  • Appropriate radiator assessments
  • A commissioning certificate after installation

Do not be afraid to ask questions. Even though the installation is free, you are entitled to a quality job.

Scams and Unsolicited Contact

Unfortunately, the ECO scheme has attracted some unscrupulous operators. Be wary of:

  • Cold calls or door-to-door salespeople claiming to offer "free government boilers" or "free heat pumps"
  • Companies that ask for upfront payment — ECO4 is free to the householder
  • Installers who cannot show their MCS certification or ECO4 registration
  • Pressure to sign up immediately without time to think

Legitimate ECO4 providers will never ask you to pay upfront and will give you time to consider your options.

ECO4 and Other Schemes

  • ECO4 + BUS: Cannot be combined for the same installation
  • ECO4 + Nest (Wales): Both target low-income households; typically one or the other
  • ECO4 + HES (Scotland): May complement each other for different measures; check with HES
  • ECO4 + local authority schemes: Some local schemes work alongside ECO4

The Future of ECO

ECO4 runs until March 2026, with an expected successor scheme (potentially ECO5 or a restructured programme) to follow. The government has indicated continued support for energy efficiency improvements in low-income homes, so similar funding is expected to remain available.

If you think you might qualify, apply sooner rather than later. Scheme budgets are finite and demand is high.

Frequently Asked Questions

Is the ECO4 heat pump really free?

Yes. If you qualify for ECO4, the heat pump installation is fully funded by energy suppliers. There is no cost to the homeowner at any stage.

Do I need to be on benefits to qualify?

Receiving means-tested benefits is the most common route to eligibility. However, ECO4 Flex allows councils to refer households that do not receive benefits but are still considered fuel-poor or vulnerable.

Can I choose my own installer?

Generally no. ECO4 work is carried out by approved contractors working under scheme managers. You do not typically choose the installer.

How long does ECO4 take?

From initial enquiry to completed installation can take several weeks to several months, depending on demand and the complexity of the work needed.

Can landlords access ECO4?

Private landlords can access ECO4 if their tenants qualify (i.e., the tenant receives qualifying benefits and the property has a poor EPC rating). The landlord may need to contribute towards the cost in some cases.

What if I do not qualify for ECO4?

The BUS grant is available to all homeowners in England and Wales, regardless of income. It provides £7,500 towards a heat pump. See our free heat pump guide for other options.

Is ECO4 available in Northern Ireland?

No. ECO4 applies to England, Scotland, and Wales only. Northern Ireland has separate programmes.

Can I get insulation as well as a heat pump through ECO4?

Yes. ECO4 takes a "fabric first" approach and will typically include insulation improvements alongside a heat pump if needed.

Think you might qualify? Contact your energy supplier or local council to check your eligibility. You can also get free quotes to compare ECO4 with the BUS grant option. See our complete UK grants guide for all available funding, or check if a heat pump makes sense for your home.