Consultation on extending the ECO4 end date – National Insulation Association response

Consultation on extending the ECO4 end date – National Insulation Association response

Closing Date: 25th September 2025
Response submitted by: National Insulation Association
For more information, please contact: info@nia-uk.org

About the National Insulation Association

The National Insulation Association (NIA) represents the insulation industry in Scotland and across the UK with a member base comprised of installers, system certificate holders, and manufacturers who provide a wide range of insulation solutions for homes and buildings. The NIA and its members are fully committed to maintaining and raising standards within the insulation industry.

No.

The National Insulation Association (NIA) does not support an extension in its current form. Extending the scheme by 6–9 months without increasing the overall obligation will slow delivery, reduce work flowing through the supply chain, and risk job losses in the insulation industry. This will destabilise businesses that have invested heavily in training, accreditation, and quality systems to meet demand.

During such an extension period, obligated suppliers will continue to collect revenues from consumer bills, potentially up to £1 billion across the sector (based on the current price cap), but without any corresponding obligation to increase the volume of installations. This creates a situation in which households are paying more, while the insulation industry is forced into a damaging lull in delivery.

If Government decides to extend ECO4, it must include a pro-rata increase in the obligation level so that suppliers are required to deliver more measures over the extension period. This would protect skilled jobs, maintain quality assurance, and prevent the boom-and-bust cycles that have previously undermined confidence in the sector.

For these reasons, the NIA believe that any extension must come with a proportionate uplift in targets.

Yes.

The NIA agrees the GBIS deadline should remain 31 March 2026. GBIS has been an ineffective scheme, therefore we do not think it should be extended. Government money is better spent on more effective insulation schemes that deliver better outcomes for residents.

Yes.

However, as outlined our response to Question 1, there must also be a pro-rata increase in the obligation for suppliers, as well as an optional carry-over allowance. Previous ECO transitions have shown that carry-over often leads to a slowdown in delivery, which is particularly concerning at a time when both installation volumes and workforce stability are critical. This concern is supported by a survey conducted by the Insulation Assurance Authority Federation (IAAF), the trade body for the insulation sector. In a recent survey, the IAAF, which found that 91% of employers said that, without timely confirmation of an ECO4 extension, they would face difficult choices, including potential staff redundancies1.

With no additional mandatory obligation on suppliers and no detail about a future obligation scheme, it is very unlikely that suppliers will exceed their existing obligations and carry this over to a future scheme. The only way to continuity of funding and avoid a damaging hiatus between ECO4 and its successor is therefore to increase the obligation level on suppliers. They will not spend extra money on additional delivery unless they are obligated to do so.

To mitigate the risk of a serious slowdown in delivery, we believe Government must provide early, binding assurances:

1. That a successor obligation will be established, with costs recoverable through the price cap.
2. That clarity will be provided on eligible measures and scoring so suppliers can be confident that work delivered under ECO4 will count towards their future targets.

It is also essential that Government launches a consultation on the Warm Homes Obligation within the Warm Homes Plan and provides prompt responses to this ECO4 consultation alongside impact assessments. Certainty is vital to give suppliers the confidence to continue investing. Without it, there is a real risk that delivery will stall as businesses adopt a wait and see approach.

1 Installation Assurance Authority Federation. 2025. Member survey: Summary of responses. Available here.

No.

As with the overall obligation itself, the solid wall and EFG minimum requirements must be increased on a pro-rata basis in line with the length of the extension period. 90% of solid wall homes in the UK are still uninsulated2 and 15% of homes remain at EPC E or below3.

Therefore, it is urgent that delivery of measures to these homes does not slow down. This risks leaving residents living in some of the UK’s poorest performing homes behind. The minimum requirements play a vital role in reducing bills for households in the least efficient homes, tackling damp and cold, and ensuring a steady pipeline of investment into the insulation and retrofit sector.

It is important, however, to recognise ongoing concerns around the quality of some solid wall installations. In our view, the central issue lies not only with contractors but also with certification bodies responsible for oversight, some of which hold financial interests in both installing and auditing work. Greater scrutiny and accountability of these bodies is essential.

There is a clear need to distinguish between:

• Contractors or subcontractors who have delivered poor-quality work, and
• Those with a proven track record of installing to a consistently high standard.

The latter group should be supported to continue delivering against scheme requirements, rather than penalised because of the failings of other contractors. As outlined in our response to Question 7, the solution to quality issues is a radical overhaul of the consumer protection landscape on ECO4. Solid wall insulation has been installed in UK homes for decades is proven to have hugely beneficial impacts for residents, when done correctly.

Maintaining the current minimum requirements provides an important signal that quality standards must be upheld, while also protecting consumer confidence and sustaining a skilled workforce. To strengthen this further, Government should prioritise the use of real performance measurement tools. Outcome-based monitoring, such as pre- and post-retrofit performance data, would address gaps in the current audit regime, which we believe is insufficient. ECO has historically focused on delivery volumes and credits, rather than outcomes, and this has contributed to quality issues. We therefore urge Government to build on ECO4’s previous commitment to integrate SMETER technology and adopt a stronger outcome-based framework through the forthcoming Warm Homes Plan and Warm Homes Obligation.

Finally, while we recognise that inquiries into solid wall measures are ongoing, we believe it would be a mistake to let the actions of a small number of rogue operators undermine confidence in fabric-first approaches. Insulation remains fundamental to decarbonisation—there is little value in installing low-carbon heating into homes that leak three times more heat than an insulated property4.

2 Department for Energy Security and Net Zero. 2025. Household Energy Efficiency Statistical Release 27 March 2025. Available here.

3 Department for Levelling Up, Housing and Communities.2025. Energy Performance of Buildings Data England and Wales. Available here.

4 Energy Transitions Commission. Achieving Zero-Carbon Buildings: Electric, Efficient and Flexible. February 2025. Find here

No.

Carry-over can only be effective if suppliers have a clear understanding of what every £1 spent on ECO4 measures will be worth under the new scheme. Energy suppliers are commercial organisations: they will not commit funds without visibility of the likely return. Without this certainty, investment will stall during the transition.

Of the two conversion methods proposed, we do not believe they are equally viable:

• Global ABS conversion factor (confirmed in the Final Stage Impact Assessment): This approach is unworkable. The Final Impact Assessment is unlikely to be published until just before the launch of any successor scheme. If, for example, a new scheme were to begin in January 2027 but the Final Impact Assessment were not available until October 2026, this would leave little or no time for suppliers to use carry-over effectively. By then, most of the critical transition period (Jan–Dec 2026) would already have passed, meaning clarity would come too late to avoid disruption.

• Initial Estimate of £1 ECO4 ABS value in a future scheme: This approach could work if applied correctly. For it to succeed, two conditions must be met: The initial estimate must be set at a commercially realistic level. The ECO4 impact assessment rate was ~£17.80. If the carry-over estimate were around £18, utilities could continue contracting at a viable rate (for example, ~£17), with confidence that the value would be recognised under the new obligation. However, if the estimate were set artificially low (e.g., below £14), the economics would not stack up, and carry-over would not take place.
• The estimate must be published early—by January 2026 at the latest—so suppliers can issue contracts in good time. If clarity is delayed until March 2026 or later, it will be of little practical value, as the industry will already be winding down.

It is also important to recognise that even if the new scheme launches in 2027, suppliers need significant lead-in time to set up systems, audit processes, and prepare supply chains. Policymakers often underestimate how much groundwork is required before a scheme can go live.

On this basis, while we think suppliers should be able to select their conversion factor, the key issue is that they must be given early and realistic certainty. Without it, suppliers will simply withhold investment, and delivery will fall away.

No.

We do not believe any measure types should be excluded from carry-over. Provided strengthened auditing and consumer protection processes are in place—as the Government has proposed—all measures should remain eligible. This will help avoid unnecessary gaps in delivery and maintain confidence in the scheme.

Yes.

We believe that the certification bodies responsible for overseeing ECO delivery must themselves be subject to greater scrutiny. There have been significant failures in consumer safeguarding, and these shortcomings must be addressed, including a review of potential conflicts of interest where organisations are both installing and auditing measures. The forthcoming National Audit Office (NAO) report on the ECO scheme will be important in this respect, and its findings should be carefully considered to inform stronger consumer protections during the ECO4 extension.

While it is important to acknowledge that poor-quality work has been carried out by a minority of contractors, many installers have consistently delivered high-quality solid wall insulation in line with certification standards. These legitimate installers should be supported to continue their work, rather than penalised by broad-brush approaches.

Consumer protection should include real performance measurement. Current auditing processes are insufficient, with certification bodies often failing to provide effective oversight. A shift to outcome-based approaches, monitoring pre- and post-retrofit performance, would help to drive up standards and rebuild consumer confidence.

We therefore recommend that the Government prioritise the integration of SMETER technology and set this out clearly within the forthcoming Warm Homes Plan and Warm Homes Obligation. This would provide a vital step toward embedding outcome-based protections across retrofit schemes.

Yes.

We agree with the proposal. Given the limited length of the ECO4 extension, it makes little sense to commit time and resources to new applications under a scheme that will shortly be replaced. Efforts should instead be focused on ensuring that the successor scheme is established and operational without delay. Concentrating on a clear and well-functioning replacement framework will provide greater certainty for industry and avoid unnecessary duplication of work.