The Energy Company Obligation, commonly known as ECO, plays an essential role in transforming the way the UK consumes and conserves energy. ECO is a government scheme that aims to improve the energy efficiency of homes and reduce carbon emissions across the country.
ECO requires energy companies to meet certain energy efficiency targets. These targets primarily focus on helping disadvantaged and low-income households cope with their energy costs while also reducing the carbon footprint of homes. Through the ECO scheme, affordable energy-saving improvements are provided to eligible households.
The funding for the ECO scheme is derived from various sources, with a significant portion collected from the Big 6 energy providers in the UK. These six major energy companies are obligated to contribute to the scheme's funding due to their market share and influence. By making these companies accountable, the government ensures that the financial burden of improving energy efficiency is shared among those who have played a significant role in the energy market.
These companies are responsible for a substantial proportion of energy consumption in the UK, it is logical for them to contribute toward combating energy inefficiency. By mandating their participation, the government ensures these companies fulfill their social responsibility and assist in achieving national energy efficiency targets.
The collected funds from the Big 6 energy providers are then directed toward implementing various energy-saving measures. These measures include initiatives such as installing insulation, upgrading inefficient heating systems, and promoting renewable energy solutions. By investing in energy efficiency improvements for households, ECO enhances living conditions, reduces fuel poverty, and helps the UK transition toward a greener and more sustainable future.