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Supplier Obligations (EERS / ECO)

What energy suppliers must do; the Energy Company Obligation.

8 min read · Last reviewed July 2026

Not all energy policy acts on energy users. A significant strand acts on the companies that sell energy, obliging suppliers to fund efficiency measures, roll out metering, and treat customers in prescribed ways. For an energy manager these schemes matter less directly than ESOS or the CCL, but they shape the market you buy from, they explain a slice of every bill, and for organisations connected to housing (local authorities, housing associations, developers) they can be a source of funding.

Scheme details were checked in July 2026. Supplier obligation schemes are revised on multi-year cycles, so check the GOV.UK and Ofgem sources at the end for the current position.

The Energy Company Obligation

The longest-running obligation is the Energy Company Obligation (ECO): larger domestic suppliers must fund energy efficiency improvements, mainly insulation and heating measures, in eligible homes, with the cost recovered across all bills. Since 2018 the scheme has focused on low-income, fuel-poor and vulnerable households. Its fourth phase, ECO4, ran from 2022 to March 2026, joined from 2023 by the Great British Insulation Scheme, which extended support to a wider band of homes in lower council tax bands.

As of mid-2026, the successor framework is being settled under the government's Warm Homes Plan, so the precise shape of the next obligation should be checked rather than assumed. The structural point holds regardless: supplier-funded retrofit programmes have been a fixture of UK policy for over two decades under changing names, and are likely to remain one.

For businesses, ECO's direct impact is minimal, as it is a domestic scheme. The indirect relevance is threefold: it appears as a policy cost within domestic bills; it sustains a large insulation and heating supply chain that commercial projects also draw on; and for social landlords it is a genuine funding route, usually accessed through partnerships with suppliers or installers.

Smart metering and settlement obligations

Suppliers are also obliged to roll out smart meters to homes and small businesses, under targets set by government and policed by Ofgem. For energy management this is quietly important: the rollout is what gives small sites the half-hourly-quality data that the M&T course depends on, without dedicated metering projects. Alongside it, the industry programme of market-wide half-hourly settlement is making granular consumption data the default basis on which electricity is bought and sold, which in turn makes time-of-use tariffs and flexibility services available to ever smaller customers.

Licence conditions and customer protections

Beneath the headline schemes sits Ofgem's licensing regime: price protections for domestic and microbusiness customers, rules on billing accuracy and back-billing (suppliers generally cannot back-bill domestic and microbusiness customers beyond 12 months), switching timescales, and complaint handling. Larger business customers negotiate contracts with fewer protections, which is why contract terms deserve the attention the energy procurement course gives them.

Supplier obligations explain the bill and shape the data

Two takeaways earn their place in an energy manager's mental model. First, part of every bill funds these schemes, which is one reason unit rates exceed wholesale prices even before networks and taxes. Second, the metering and settlement obligations determine what consumption data exists for your sites, and that data is the raw material of everything the M&T discipline does.

The next lesson moves up a level, from schemes to strategy: the carbon budgets that set the UK's legally binding trajectory, and what that trajectory implies for every organisation's energy plans.

Sources and further reading