So I heard that Ed-E can utilize the Heavy Incinerator very nicely however whenever I put the heavy incinerator along with flamer fuel in his inventory, he never uses it. I tried many things such as recycling spent fuel and using that, using the normal incinerator, swithing his combat modes, I tried fighting long range and short range, I tried sending him back and then making him a follower again, however nothing seems to work. If anyone can help it will be greatly appreciated! ( also when I give him the heavy incinerator and fuel, it shows the ammo count in the incinerator as 0/0 however when I take back the fuel it shows that there is ammo?)

I'm afraid you heard wrong, Ed-E is not a humanoid compaction and thus can never fire weapons given to him.

You can get ED-E's weapon (or armor) upgraded in the game during a quest. However it is still an energy weapon like a laser.

ED-E can only carry other weapons (and whatever else you give him) but not use them.

Ahh thanks for clearing that up, do you know which follower would be the best to utilize the Incinerator?

Since it's categorized as an Energy Weapon, then Arcade.

I think someone made a mod that allowed ED-E to use other weapons, but his upgraded one is strong enough that I never felt the need to try it out.

Any follower with a high Energy Weapons skill would be best - that would be either Arcade Gannon or Veronica. Veronica is primarily unarmed, but she does decently well with energy weapons too.