If your business is a certain size, you may be required to comply with the Energy Savings Opportunity Scheme (ESOS). Here, we explain how the ESOS energy scheme works, who needs to be compliant, what’s involved in an ESOS energy audit, and how to make sure you meet your obligations while also benefiting.
What is the ESOS scheme?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory UK energy assessment scheme for large organisations. It’s a government-backed initiative designed to help large companies identify business energy inefficiencies and reduce consumption.
It requires qualifying businesses to measure their total energy consumption and carry out regular business energy audits to identify cost-saving opportunities.
ESOS energy audits aim to improve the energy efficiency across business premises and operations, helping companies reduce both energy costs and carbon emissions.
Who runs it?
The ESOS scheme is administered by the Environment Agency in England, with equivalent bodies responsible in other parts of the UK, like Natural Resources Wales, SEPA in Scotland, and NIEA in Northern Ireland.
These regulators oversee compliance, maintain records, and have the authority to issue penalties for non-compliance. They can also provide guidance on how businesses should approach ESOS energy management and reporting.
ESOS regulations for UK businesses
To qualify for ESOS, your organisation must meet at least one of the following criteria:
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Employ 250 or more people, or
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Have an annual turnover exceeding £44 million and a balance sheet total over £38 million
For the purpose of ESOS criteria, a person is considered employed if they’re:
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An employee
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An owner or manager
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A partner
If your business meets these thresholds, to be ESOS-compliant, you are required to:
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Measure the total energy consumption across your operations
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Conduct an energy audit for ESOS covering at least 95% of usage
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Appoint a qualified ESOS lead assessor
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Submit a compliance notification to the regulator
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Maintain records of your ESOS energy assessment
When is the next compliance cycle deadline?
ESOS operates in four-year compliance cycles. The most recent completed Phase 3 ended on 5 June 2024 (extended from 5 December 2023), and here are the key upcoming ESOS Phase 4 key dates and deadlines:
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Compliance period: 6 December 2023 to 5 December 2027
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Qualification date: 31 December 2026 (this is the specific point in time used to determine whether your business is required to comply)
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Compliance deadline (submission): 5 December 2027
Phase 4 follows the same guidelines as Phase 3, and mandatory net-zero reporting has been delayed to Phase 5.
It’s important to understand the rolling deadlines for different components within each phase, such as when you need to submit documents like action plans, which is why support from an expert energy advisor is crucial.
How to get an ESOS energy audit
Arranging an ESOS energy audit typically starts with reviewing whether your business qualifies under the scheme and identifying the scope of your energy usage.
Because ESOS compliance can be complex, many organisations choose to work with an experienced energy consultant or broker who can coordinate the process, appoint a qualified lead assessor, and ensure your business meets all the necessary requirements.
A specialist energy advisor can also help you interpret the findings of your ESOS energy audit and identify practical ways to reduce consumption and improve efficiency.
If you’d like support with ESOS compliance or help arranging an energy audit, you can get started by discussing your needs with an experienced energy advisor below.
Book your ESOS audit today
What your energy audit should include
An ESOS energy audit must provide a comprehensive overview of your organisation’s energy usage and identify opportunities for improvement.
Typically, your audit and action plan should include:
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An energy consumption breakdown across the whole business.
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Detailed site assessments of major energy-using operations.
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Identification of inefficiencies and areas of excessive energy use.
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Recommendations for energy-saving measures.
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Estimated cost savings and payback periods for each recommendation.
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Prioritised action plan outlining which improvements to implement and when.
Although ESOS does not legally require you to implement the recommendations, you still have to submit an action plan, and many businesses choose to act on them to achieve long-term energy savings.
Benefits of an ESOS energy audit
Although ESOS compliance is mandatory for certain companies, it can still provide significant benefits, including:
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Identifying hidden inefficiencies in your energy usage.
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Reducing operational costs through improved energy efficiency.
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Supporting carbon footprint reduction and reaching sustainability goals.
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Improving energy management strategies across your organisation.
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Enhancing your reputation with stakeholders and customers.
Realistically, for many businesses, the long-term savings identified through ESOS energy audits outweigh the cost you’ll pay to be compliant.
Why choose Money Helpdesk for your energy audit?
ESOS compliance can be complex, with strict requirements and timelines around energy measurement, reporting, and audit standards.
Identifying the right approach and ensuring everything is completed correctly can be time-consuming without expert support.
Here’s why businesses across the UK use Money Helpdesk when arranging ESOS energy audits:
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Access to experienced commercial energy advisors
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Support coordinating ESOS compliance and audit requirements
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Guidance from qualified ESOS lead assessors
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Free initial chat with no obligation to proceed further
If you’d like help arranging an ESOS energy audit or ensuring your business meets the latest compliance requirements, you can get started here.
FAQs
Yes, ESOS compliance can still be required for non-profit organisations if they meet the qualification thresholds, such as employee count or financial criteria. The scheme focuses on organisational size rather than sector status.