ECO4 Replacement 2026: The Warm Homes Plan and What It Means for Solar

ECO4 is not dead — it has been extended to 31 December 2026. But there will be no ECO5. The government has confirmed the supplier obligation model is ending for good, and the funding framework replacing it is already live. Here is a clear breakdown of what has changed, what is coming, and what you should do right now if you want government-funded solar.

What Happened to ECO4?

ECO4 has not ended — but its days are numbered. In late 2025, the government announced an extension from the original March 2026 deadline to 31 December 2026. This extension gives large energy suppliers more time to fulfil their existing obligations; it does not increase targets or open new applications for Innovation Measures.

The more significant announcement is what will not happen: there will be no ECO5. The government has explicitly confirmed that the Energy Company Obligation — the model where large energy suppliers are legally required to fund energy upgrades in lower-income homes — is ending permanently after ECO4 closes.

This is a deliberate policy shift. Rather than obligating private companies to fund improvements (and allowing them to recover those costs through customer bills), the government is moving to direct public grant funding and subsidised loans delivered through local authorities. That is what the Warm Homes Plan is.

If you currently qualify for ECO4, apply now. December 2026 will arrive quickly, demand typically spikes near scheme deadlines, and processing takes 4–12 weeks.

The Warm Homes Plan: What Is Replacing ECO4

The Warm Homes Plan was published on 21 January 2026. It is not a single scheme but a policy framework with three delivery mechanisms, all pointing at the same overarching goal: upgrade 5 million homes, lift 1 million households out of fuel poverty, and cut domestic carbon emissions across the UK's housing stock.

The overall budget is £15 billion across this parliament. The three pillars are:

1. Warm Homes: Local Grant — already live since April 2025, delivering fully funded upgrades to lower-income households through local councils
2. Consumer Loan Scheme — launching April 2027, offering government-backed 0–3% loans to all homeowners regardless of income
3. Future Homes Standard — published March 2026, coming into force March 2027, requiring solar panels on all new-build homes

Each of these matters differently depending on your situation. The rest of this article covers them in detail.

Warm Homes: Local Grant — The Main ECO4 Successor

The Warm Homes: Local Grant is the primary replacement for ECO4 and GBIS for lower-income households. It has been running since April 2025, which means it is not a future promise — it exists now and you can apply today.

Who Qualifies

You may be eligible if:

• Your household income is below £36,000 per year, OR you receive means-tested benefits (Universal Credit, Pension Credit, Child Tax Credit, Working Tax Credit, Income Support, income-based JSA or ESA, Housing Benefit)
• Your property has an EPC rating of D, E, F, or G
• You live in England (Scotland and Wales have separate devolved schemes — see below)
• The property is your primary residence

The income threshold is notably more generous than ECO4's £31,000 limit, bringing more households into scope.

What It Covers

The Local Grant can fund a range of measures, with the council determining which are most appropriate for your home:

• Solar PV panels
• Air source heat pumps
• Cavity wall and loft insulation
• Solid wall insulation
• Smart heating controls
• Other low-carbon upgrades identified by the retrofit assessor

Funding is fully free to the homeowner — there is no contribution required. The government funds the work directly, and your local council manages delivery.

How to Apply

Unlike ECO4, which ran through energy suppliers, the Local Grant is applied for through the government and delivered by your local council.

• Apply online at gov.uk/apply-warm-homes-local-grant
• Or call the helpline: 0800 098 7950
• Your local council will carry out an assessment and determine which measures your home needs

The scheme is expected to run until March 2028, so there is time — but not unlimited time.

Consumer Loan Scheme — 0% Solar Loans From 2027

This is the provision for households who do not qualify for the Local Grant — and it is genuinely significant.

The Consumer Loan Scheme is set to launch in April 2027. The key difference from every current scheme is that it has no income cap: it is aimed at all homeowners, not just those on lower incomes.

Details still being finalised include:

• Interest rate: confirmed at 0–3%, with the expectation that most solar loans will be at or near 0%
• Budget: £1.7 billion allocated
• Eligible measures: solar panels, battery storage, heat pumps, insulation
• Loan terms: not yet confirmed — further detail expected later in 2026

This matters because it addresses the fundamental problem that currently exists for the 80%+ of households who earn too much for means-tested grants but still face a £6,000–9,000 outlay to go solar. A government-backed 0% loan removes the interest cost that currently makes solar finance less attractive.

The scheme is not open yet. If you want solar before April 2027, the options are paying upfront (with 0% VAT applying to everyone) or using a private finance product in the meantime.

What About GBIS?

The Great British Insulation Scheme (GBIS) ended in March 2026 and has not been extended. There will be no GBIS replacement as a standalone scheme.

Its function — funding insulation and some secondary measures for lower-income households — has transferred to the Warm Homes: Local Grant. If you were hoping to access GBIS funding, your route now is the Local Grant. Eligibility and the range of covered measures are similar, and the Local Grant is arguably more generous.

Boiler Upgrade Scheme: Still Running

The Boiler Upgrade Scheme (BUS) is worth mentioning separately because it is still active and relevant if you are considering combining solar with a heat pump.

The current position:

• £7,500 grant for air source heat pumps
• £7,500 grant for ground source heat pumps
• New £2,500 grant for air-to-air heat pumps (added in 2025)
• Runs until 2028
• The EPC requirement has been relaxed — you no longer need to complete insulation improvements before applying

Solar and heat pumps work particularly well together: solar generation during daylight hours can power a heat pump, significantly reducing running costs. If you are considering both, the BUS grant for the heat pump substantially improves the combined payback picture.

Future Homes Standard: Solar Mandatory on New Builds

The Future Homes Standard was published in March 2026 and comes into force in March 2027. It applies to all new residential construction in England.

The headline requirements relevant to solar:

• All new homes must have solar panels covering at least 40% of ground floor area in equivalent roof space
• Gas boilers are banned in new-build homes
• New homes must meet significantly tighter energy performance requirements overall

The government estimates this will triple domestic solar capacity by 2030, simply through the volume of new-build homes required to have panels fitted.

If you are buying a new-build home completed after March 2027, solar panels will be included as standard. For existing homes, the retrofit schemes described above remain the relevant route.

Scotland, Wales, and Northern Ireland

The Warm Homes: Local Grant applies to England only. Each devolved nation has its own equivalent:

Scotland — Warmer Homes Scotland provides fully funded upgrades for households in or at risk of fuel poverty, with grants of up to £15,000. Household income must be below £40,000. Home Energy Scotland also offers interest-free loans of up to £15,000 for renewable measures including solar and batteries.

Wales — The Nest scheme provides free home energy improvements for households on low incomes or with a health condition, with grants of up to £10,000. Check gov.wales or the Nest website for current eligibility.

Northern Ireland — NI has separate energy efficiency schemes administered by the Department for the Economy. The Affordable Warmth Scheme and Boiler Replacement Scheme cover different measures. Check nidirect.gov.uk for current availability.

ECO4 vs Warm Homes Plan: Key Differences

The shift from ECO4 to the Warm Homes Plan is more than a name change. Here is how the two models compare:

The higher income threshold under the Local Grant is the most practically significant difference — it brings an estimated 2 million additional households into scope compared to ECO4.

The change in who funds the scheme is the structural difference. Under ECO4, your energy supplier ultimately absorbs the cost (and recoups some of it through slightly higher energy tariffs across their customer base). Under the Warm Homes Plan, the funding comes directly from public spending, which the government argues is more transparent and better targeted.

What Should You Do Now?

Your best next step depends entirely on your income and circumstances.

If your household income is below £36,000 (or you receive means-tested benefits): Apply for the Warm Homes: Local Grant today at gov.uk/apply-warm-homes-local-grant or by calling 0800 098 7950. If you currently also qualify for ECO4, there is no harm in enquiring through both routes — whichever processes your application first is fine.

If your household income is above £36,000: You have two paths. Wait for the Consumer Loan Scheme launching April 2027 and access government-backed 0% financing. Or go solar now — you still benefit from 0% VAT on solar panels regardless of income, and a typical 4kW system costs £6,000–8,500 with current payback periods of 7–10 years.

If you are in Scotland or Wales: Apply through your devolved scheme. Warmer Homes Scotland and the Nest scheme in Wales both fund solar for eligible households and are worth checking before assuming you are not covered.

If you want a heat pump alongside solar: The Boiler Upgrade Scheme's £7,500 grant is still running. A solar-and-heat-pump combination makes strong financial sense — get quotes for both together and factor in the BUS grant when comparing costs.

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The Bigger Picture

The direction of government energy policy is clear: more solar, funded more directly, with a wider group of households in scope. The shift from obligating energy suppliers (ECO4) to funding directly (Warm Homes Plan) is designed to be more transparent and better targeted. The addition of a no-income-cap loan scheme in 2027 is a meaningful change that addresses one of the biggest gaps in the current system.

None of this means you should wait. ECO4 is still live and processing applications. The Local Grant is already running. The best time to go solar is when the funding is available and your roof is ready. For most households, that time is now.

For a full breakdown of every grant and funding route available in 2026, see our complete solar grants guide. For detail on the Warm Homes Plan policy framework, see our Warm Homes Plan overview.

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