The UK Government has announced its flagship £6 billion energy efficiency scheme will be entirely focused on low income and vulnerable households.

It will fund energy-saving upgrades in more than one million homes over the next three and half years.

The Energy Company Obligation (ECO) 3 scheme, which requires suppliers to provide energy efficiency and heating measures, will support households in or at risk of fuel poverty while being expanded so more companies can be included.

Its other main policies include requiring 15% of measures to be delivered to rural homes, increasing the proportion of the scheme that can be delivered under local authority to 25% and reducing the current supplier obligation threshold of 250,000 customer accounts to 200,000 from April next year and 150,000 from 2020.

ECO3 will also support households that have broken heating systems by allowing the equivalent of 35,000 of them to be replaced per year. In addition, at least 17,000 solid wall homes must be treated per year, either through solid wall insulation or using a combination of other technologies, if equivalent savings can be achieved in the property.

The government has increased the overall target to £8.25 billion of lifetime bill savings.

The news comes as it confirmed the energy price cap – which is expected to protect 11 million homes from increases in tariffs – will become law this winter as it passed through Parliament yesterday.

Energy and Clean Growth Minister Claire Perry said: “This cap coupled with our £6 billion energy efficiency scheme will help build a market that puts consumers at its heart and ensures that those most at risk of fuel poverty are protected.

“Energy suppliers now need to get on board, ditch their old practices and improve their efforts to deliver value, choice and excellent customer service.”

Ms Perry is the headline speaker at Energy Live Expo on 31st October in London. To register, you can e-mail [email protected].