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Budget commitments to reduce taxes on electricity bills are an important step in reducing household bills and helping people switch to clean energy, but the cancellation of ECO from 2026 makes it critical that the Warm Homes Plan is launched soon and provides a comprehensive home decarbonisation programme.

From April 2026, the majority of legacy Renewables Obligation costs will be moved off electricity bills and into general taxation and the Energy Company Obligation (ECO) will end, replaced by £1.5bn addition funding for the Warm Homes Plan. The Government calculates that together these measures will save the average household about £150 a year.

Despite the importance of lowering electricity bills, scrapping ECO before the launch of the Warm Homes Plan is concerning. ECO is the main scheme designed to tackle fuel poverty and improve the energy efficiency of homes in Britain. Cancelling it saves £1.7bn annually, but the government has only committed to an additional £1.5bn in the Warm Homes Plan (presumably with this funding spread over the rest of this parliament), so spending on fuel-poor and low-income homes looks to be reduced.

ECO4 was clearly in need of reform to improve targeting, oversight and quality, with the recent National Audit Office report revealing the extent of poor-quality installs, particularly for solid wall insulation. However, ECO has improved over 2.8million homes since 2013, with the scheme accounting for 80% of all measures installed in 2024.

Consolidating funding into a comprehensive programme through the Warm Homes Plan could be positive, but the plan has been delayed for some time, and the end of ECO in April 2026 leaves very little time for new arrangements to scale up. The priority now needs to be on ensuring follow on schemes build customer trust, are long-term and give certainty to the industry and households. The retrofit and clean heat industry has been subject to repeated stop-start policy cycles and the current uncertainty risks job losses in the sector – precisely at the time when we need to be growing the industry.

The Warm Homes Plan needs to provide comprehensive offers for households with targeted support for those on the lowest incomes. Priorities include:

• Rebuilding trust and confidence
  Low public awareness, lack of trust, and complex eligibility requirements have undermined support schemes in the past. Area-based delivery through local authorities and community organisations offers promise here – these bodies tend to have deeper local knowledge, stronger community trust, and are better positioned to develop local skills and supply chains.
• Taking a whole-house approach
  Integrating building fabric improvements with low carbon technologies, such as heat pumps, solar panels, and battery storage, that enable cost savings through flexibility. Supporting fuel-poor household to access the benefits of clean, smart technologies like integrated solar and storage could bring down bills and help ensure home decarbonisation is fair for all.
• Providing tailored financing
  A tailored approached to financing which includes free measures for low incomes and a combination of grants and low-cost finance for middle-income households. This could include a range of measures such as property linked finance and support for councils to develop bespoke local financing programmes that blend together public and private funding.
• Developing trusted support networks
  Development of integrated, trusted sources of national and local advice. Locally, ‘One-Stop-Shop’ advice services can guide households throughout their retrofit journey, connecting them with approved contractors and area-based schemes.
• Engaging people on their terms
  UKERC research shows people engage with home improvements for diverse reasons – not just bill savings or carbon reduction. Simplifying the journey and aligning with what people actually want from their homes is crucial to making decarbonisation attractive.

Investments in home decarbonisation pay dividends far beyond individual households – energy efficiency delivers permanent savings on household bills and lowers the cost of new power infrastructure. It’s therefore positive to see strong commitment from Government on resourcing for the Warm Homes Plan and the retention of the Boiler Upgrade Scheme; but the Warm Homes Plan cannot afford further delays – it must be comprehensive, properly funded, and built to last.