ECO4 Scheme: Opportunities for HVAC Engineers in the UK

The Energy Company Obligation (ECO) scheme is a government policy requiring large energy suppliers to fund energy efficiency improvements in low-income and vulnerable households across Great Britain. ECO4 is the fourth phase of the scheme, which ran from April 2022 and covers the period to March 2026 (with a potential extension under successor programmes).

Under ECO4, energy suppliers — including British Gas, EDF, OVO, E.ON, and others — are legally obligated to achieve targets for carbon savings and energy efficiency improvements in qualifying homes. They do not carry out the work themselves. Instead, they fund it through a network of managing agents (also called aggregators) who commission approved installers to carry out the physical work.

The key features of ECO4 relevant to HVAC engineers:

• It targets low-income households: eligible properties are identified through means-testing (benefits-based eligibility) or via local authority referral. The homeowner pays nothing — the energy company funds 100% of the installation cost.
• It covers a range of measures: loft insulation, cavity wall insulation, solid wall insulation, and — most relevant to HVAC — low-carbon heating systems including heat pumps, as well as heating upgrades where current heating is inadequate.
• Volume is significant: ECO4 has an obligation of approximately £1 billion per year across all measures. Heat pump installations under ECO4 have increased as the scheme has been restructured to prioritise low-carbon heating.

Not all ECO4 work falls within HVAC scope. The measures most relevant to HVAC engineers are:

Heat Pump Installation

ECO4 funds air source and ground source heat pump installations in qualifying properties where heat pumps are technically suitable and viable. This is the primary opportunity for MCS-certified HVAC engineers. ECO4 heat pump work is government-funded — the customer pays nothing — and the installer is paid through the managing agent/aggregator.

Key requirement: MCS certification is required to install heat pumps under ECO4. Without MCS, you cannot access this work through legitimate ECO4 channels.

Heating Upgrades

Where a qualifying property has a broken, absent, or seriously inadequate heating system, ECO4 can fund a heating replacement or upgrade. Depending on the fuel type available and the property's energy efficiency, this may include heat pump installation rather than a like-for-like gas heating replacement, particularly as the scheme pushes towards low-carbon measures.

Related Measures (Supporting Work)

ECO4 requires a "whole house approach" — meaning insulation and heating measures should be considered together. This can create supporting work for HVAC businesses: a heat pump installation may be accompanied by loft and wall insulation (done by insulation contractors), but the heat pump element goes to an MCS-certified HVAC installer. Some larger businesses take on multiple measures directly; most HVAC businesses focus on the heating element.

Becoming an approved ECO4 installer involves meeting several requirements and registering with the relevant approval bodies:

TrustMark Registration

TrustMark registration is a mandatory requirement for ECO4 installers. TrustMark is a government-endorsed quality scheme that requires participating businesses to pass a technical assessment, carry appropriate insurance, and commit to a complaint resolution process. Without TrustMark registration, your business cannot legally participate in ECO4 work.

TrustMark registration involves:

• Applying through a TrustMark Scheme Provider (various trade associations and certification bodies are approved TrustMark providers)
• Demonstrating competence through an assessment (for HVAC work, this typically requires evidence of relevant qualifications including F-Gas and MCS)
• Carrying a minimum level of public liability insurance (usually £2 million)
• Meeting consumer protection requirements including access to an alternative dispute resolution service
• Annual TrustMark registration fee: typically £300–£600 depending on the scheme provider

MCS Certification

For heat pump installations specifically, MCS certification is required in addition to TrustMark. MCS is already described in detail in our heat pump business guide — if you're MCS-certified, you meet the technical requirement for ECO4 heat pump work. MCS and TrustMark registrations are linked — MCS certified businesses can register with TrustMark through MCS's own scheme provider status.

Connecting with a Managing Agent / Aggregator

Energy suppliers do not deal directly with individual installers. They work through managing agents (also called aggregators) who manage their ECO4 obligations by commissioning installers. To access ECO4 work, you need to register with one or more managing agents.

Major ECO4 managing agents include Ignite Energy, Green Energy Together, Evo Energy, and others. They will assess your TrustMark and MCS registration, carry out due diligence on your business, and then refer jobs to you within your service area. The managing agent takes a margin from the energy company obligation value — the rate you receive is after this margin.

Running alongside ECO4 is the Great British Insulation Scheme (GBIS), formerly known as the Energy Company Obligation for Great Britain (ECO+). GBIS runs from 2023 to 2026 and is targeted at improving insulation in the least energy-efficient homes, including properties in middle-income bands as well as low-income households.

GBIS primarily covers insulation measures (loft, cavity wall, solid wall, floor). It is less directly relevant to HVAC engineers than ECO4's heating obligations — but there is crossover:

• Some HVAC businesses have expanded into insulation measures to offer a broader package to ECO managing agents
• Improved insulation in a property improves heat pump viability — some GBIS and ECO4 projects are coordinated to insulate properties before or alongside heat pump installations
• GBIS creates network relationships with managing agents who also commission ECO4 heat pump work

GBIS requires TrustMark registration and appropriate installer qualifications for each measure type — PAS 2030 for most insulation work. This is a significant additional qualification burden that most HVAC businesses without prior insulation experience won't pursue.

ECO4 can provide significant work volume for qualifying HVAC businesses, but it operates differently from direct customer work. Understanding the trade-offs helps you decide how much ECO4 to build into your pipeline:

Advantages of ECO4 Work

• Volume and pipeline visibility: managing agents can provide a consistent flow of jobs within your service area, reducing the time and cost of customer acquisition. You don't pay per lead.
• No payment risk from customers: ECO4 customers pay nothing. Payment comes from the managing agent, which is preferable to chasing private customers for payment — though managing agent payment terms (typically 30+ days) need to be factored in.
• Zero customer cost removes a major objection: selling a heat pump installation where the customer pays nothing is obviously easier than a private sale where the customer pays even a subsidised amount.

Disadvantages of ECO4 Work

• Lower margin than private installations: managing agents take a significant cut of the obligation value. ECO4 heat pump installations typically return lower revenue to the installer than a private BUS grant installation of equivalent complexity — often 20–35% lower revenue for similar work.
• Property condition complexity: low-income properties in ECO4 eligibility sometimes have deferred maintenance issues that complicate installation. Unforeseen work on a fixed-price ECO4 job erodes margin quickly.
• Administrative burden: ECO4 compliance documentation is extensive. MCS, PAS 2035 (the assessment standard for retrofit work), TrustMark lodgement, and managing agent reporting requirements all add overhead. Many installers underestimate this when entering the scheme.
• Managing agent dependency: ECO4 work comes through managing agents, not directly from customers. Your relationship and reputation with the managing agent matters more than your reputation with the end customer — a different dynamic from private work.

One of the less widely understood requirements for ECO4 heat pump installations in particular is compliance with PAS 2035 — the British Standards Institution specification for the installation of energy efficiency measures in existing dwellings.

PAS 2035 requires that whole-house retrofit projects are assessed and coordinated by a Retrofit Coordinator — a separately qualified individual who ensures that different measures (insulation, heating, ventilation) are considered holistically and in the right sequence. The Retrofit Coordinator role is separate from the installer role.

For HVAC engineers installing heat pumps under ECO4:

• You don't need to be a Retrofit Coordinator yourself, but the project must have one
• Managing agents typically either employ Retrofit Coordinators or work with qualified professionals to fulfil this role
• You do need to ensure your heat pump installation complies with the Retrofit Coordinator's specification and the overall PAS 2035 plan for the property
• Documentation requirements under PAS 2035 are significant — your installation records must be compatible with the project's PAS 2035 compliance documentation

Understanding PAS 2035 before entering the ECO4 market will prevent surprises. Managing agents should brief you on their PAS 2035 workflows when you register with them.

ECO4 suits some HVAC businesses well and is a poor fit for others. Here's how to assess it:

ECO4 is a good fit if:

• You are MCS-certified and TrustMark registered (or willing to become so)
• You want a reliable volume of jobs without significant customer acquisition spend
• Your service area has a concentration of ECO4-eligible housing stock (typically older, terraced properties in less affluent areas)
• You have or can develop the administrative capacity to handle ECO4 compliance documentation
• You are comfortable working with managing agent payment terms (30+ days)

ECO4 is a poor fit if:

• You are primarily a commercial HVAC business without domestic heat pump installation capacity
• Your margins depend on private installation pricing — ECO4 rates are materially lower
• You are not MCS certified and don't plan to become so
• You want direct customer relationships and the flexibility of private market pricing

Many successful HVAC businesses treat ECO4 as one channel alongside private BUS grant installations and commercial work — not as their primary business model. A balanced pipeline of private BUS grant installs (better margin, direct customer relationship) and ECO4 work (volume, lower acquisition cost) can be a sensible combination for an MCS-certified heat pump business.