ECO4 Explained: Can Landlords Use Government Grants for EPC Improvements?

ECO4 — the Energy Company Obligation — is one of the largest energy efficiency funding schemes in the UK, but its eligibility rules confuse many landlords. The short version: you cannot apply directly, your tenant must qualify, and the improvements are delivered through approved installers funded by energy suppliers. If your tenant does qualify, ECO4 can fund insulation, heating upgrades and sometimes glazing at no cost to you — all of which count towards your EPC improvement and the £10,000 cost cap.

The scheme runs until December 2026, so the window is narrowing. This guide explains exactly how ECO4 works, who qualifies, what improvements are covered, and how to combine it with other funding to meet the October 2030 Band C deadline.

What ECO4 is

The Energy Company Obligation is a government scheme that requires large energy suppliers — those with more than 150,000 domestic customers — to fund energy efficiency improvements in homes across Great Britain. It is not a grant you apply for directly; instead, energy companies commission approved installers to deliver the work, and the cost is recovered through a small levy on all household energy bills.

ECO4 is the fourth phase of the scheme. It launched in April 2022 and runs until 31 December 2026. It replaced ECO3 and introduced stricter targeting to ensure funding reaches the households most in need.

The key change from previous ECO phases is the “fabric first” approach. ECO4 prioritises insulation and building fabric improvements over heating system replacements, reflecting the government’s view that reducing heat loss is more cost-effective than simply upgrading the boiler in a leaky building.

Eligibility for landlords

This is where it gets nuanced. ECO4 eligibility is based on the tenant, not the landlord or the property. Your tenant must fall into one of these categories:

• Benefits-based: The tenant (or someone in their household) receives a qualifying benefit. These include Universal Credit, Pension Credit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Child Tax Credit (with income under £16,190), Working Tax Credit (with income under £16,190), and Housing Benefit.
• LA Flex (Local Authority Flexible Eligibility): Local councils can refer households that do not receive qualifying benefits but meet locally-defined criteria for fuel poverty or low income. Each council sets its own thresholds, which vary considerably. Contact your local authority’s energy team to find out their LA Flex criteria.

Additionally, the property must have an EPC of Band D, E, F or G. Properties already at Band C or above are not eligible for ECO4 funding — they do not need it.

What improvements are covered

ECO4 can fund a wide range of energy efficiency measures, with a strong emphasis on fabric improvements:

• Insulation: Loft insulation, cavity wall insulation, solid wall insulation (internal or external), flat roof insulation, room-in-roof insulation, underfloor insulation
• Heating: First-time central heating systems, boiler replacements (in some circumstances), heating controls and thermostatic radiator valves
• Glazing: In certain cases, single glazing can be upgraded to double glazing, though this is typically only funded as part of a broader package
• Ventilation: Mechanical ventilation with heat recovery (MVHR) where required to prevent condensation after insulation work

ECO4 requires a “whole house” approach. Installers must assess the property holistically and deliver a package of measures that achieves a meaningful improvement in the EPC band — typically raising it by at least one band. Single-measure installations are generally not permitted under ECO4 unless the assessor determines that only one measure is needed or feasible.

How to apply

You do not apply directly to the government or to energy companies. The process works through approved installers:

• Step 1: Confirm your tenant’s eligibility. Ask whether they receive any qualifying benefits, or contact your local authority about LA Flex referral.
• Step 2: Check your property’s EPC to confirm it is rated D or below.
• Step 3: Find an ECO-approved installer. You can search through the TrustMark registered business directory or contact energy suppliers directly. Many installers have dedicated ECO teams.
• Step 4: The installer will visit the property, conduct a survey, verify tenant eligibility documentation and design a package of improvements.
• Step 5: The installer submits a funding application to one of the obligated energy suppliers. If approved, the work is scheduled and completed at no cost to the landlord or tenant.
• Step 6: After completion, a new EPC is lodged to evidence the improvement.

The entire process typically takes 6–12 weeks from initial enquiry to completed installation. In areas with high demand, wait times may be longer.

ECO4 and the £10,000 cost cap

This is a critical point for landlords planning their compliance strategy. The £10,000 cost cap measures your personal expenditure on qualifying energy efficiency improvements. ECO4 funding is not your money — it is energy company money — so it does not count towards the cap.

However, the improvements delivered through ECO4 do count as qualifying measures. This means:

• If ECO4 funds £4,000 of insulation work and your property still does not reach Band C, your remaining personal budget under the cost cap is still the full £10,000
• If ECO4 funds enough work to get you to Band C, you have achieved compliance without spending anything from your own pocket
• If ECO4 partially improves the property and you then spend an additional £6,000 on, say, a heating upgrade, only the £6,000 counts towards the cap

Scheme timeline

ECO4 opened in April 2022 and is legislated to run until 31 December 2026. After that date, no new ECO4 applications will be accepted. Work already approved must be completed within the scheme’s close-out period, but you cannot start new applications.

With nine months remaining (as of March 2026), the window is closing. If your tenant is eligible, act now. Installer capacity is finite, and demand typically surges in the final months of any government scheme as awareness spreads and deadlines loom.

ECO5 — what’s coming next

The government has indicated that ECO will continue in some form beyond 2026, though the details of ECO5 have not yet been finalised. Based on government consultations and the direction of energy policy:

• ECO5 is expected to launch in January 2027, immediately following ECO4’s closure
• It is likely to maintain the focus on low-income and fuel-poor households
• The “fabric first” approach is expected to continue, with even greater emphasis on insulation
• Heat pump installations may receive more prominence, aligning with the government’s electrification targets
• Targeting may tighten further, potentially narrowing eligibility

Relying on ECO5 is a gamble. The scheme may have different rules, narrower eligibility or reduced funding levels. If your tenant qualifies for ECO4 today, the certain funding available now is worth more than the uncertain funding that may come later.

For a complete overview of every grant and scheme available to landlords in 2026, see our home energy grants guide. And for the broader improvement strategy, see how to improve your rental property’s EPC rating.