People living in poorly insulated homes face paying a nearly £2,000 premium on their energy bills when this winter’s price cap hike comes into force, new analysis shows.
Based on forecast figures, published earlier this week by Cornwall Insight, the Energy and Climate Intelligence Unit (ECIU) has estimated that the typical household living in an Energy Performance Certificate Band C-rated home will see their annual dual fuel bills rise to £3,877 when the price cap is next updated in October.
This figure then rises to £4,474 per annum for less well insulated Band D rated homes.
Those living in Band E and F rated properties will see their annual energy bills rise to £5,186 and £5,854 respectively, according to the analysis.
The ECIU says this means that householders living in Band F properties will be spending £1,978 more on energy bills than their counterparts in properties rated Band C, the benchmark that the government has said all rented homes should meet by 2025.
An industry survey by Gemserv, published last month, showed that 80% installers say they have capacity to take on 25% to 50% more work.
Jess Ralston, senior analyst at ECIU, said: “These stark differences between highly insulated and poorly insulated homes show the real-world impacts insulation could have in time to dent exorbitant bills this winter. The most vulnerable, such as the elderly, tend to live in colder homes and these are the groups that are being placed at risk by inaction from the government on energy efficiency.
“The ECO insulation scheme has worked well and is knocking at least £600 a year off the bills of fuel poor households, but government is non-committal on doing more. We have to consider security of supply too, but more UK gas won’t come online anytime soon, so insulation is our best bet to shield us from the whims of Putin and lower bills during this cost-of-living crisis and each year after.”
The Association of Decentralised Energy backed calls to help poorer customers by speeding up the rollout of energy efficiency measures.
Chris Friedler, ADE’s energy efficiency policy manager, said: “With bills set to soar to more than £4,000 a year for the average household, the economics for household energy are changing incredibly quickly.
“Given that the UK’s least efficient homes are likely to pay almost £2,000 more than acceptably insulated homes next year, it makes complete financial sense to upgrade homes right now. The government must urgently provide a path for these households to protect themselves this winter and every winter to come.”
The ECIU’s analysis appears following a report in ‘The Sun’ newspaper that chancellor of the exchequer Nadhim Zahawi and business and energy secretary Kwasi Kwarteng, who both support Conservative leadership race front runner Liz Truss, will meet suppliers tomorrow to discuss how to tackle spiralling energy bills.
According to the report, the Treasury is considering expanding the scope of the energy windfall tax, which was introduced by Truss’ leadership rival Rishi Sunak before he resigned as chancellor.
This morning also saw Truss row back on her remarks last week ruling out “handouts” to help energy customers when October’s price cap hike kicks in.
Quizzed in an interview with Sky News on these comments, she said: “I will do all I can to make sure that energy is affordable, and that we get through this winter.”
The need to invest in energy efficiency will be one of the key themes at the Utility Week Forum, which will take place in London 8-9 November. See the full agenda here.