New analysis from the ECIU (Energy & Climate Intelligence Unit) has found that low energy efficiency homes will be paying on average £1,000 more per year for gas than those that are well insulated, putting both bill payers and taxpayers on the hook for higher than necessary prices.
Homes rated EPC band F are expected to have a gas bill £968 higher than one rated band C. The average home in the UK falls in band D, where bills are expected to be £370 more than if they had been upgraded to band C, the government’s target for most homes by 2035.
The cost of increased energy prices will fall upon not just the householder, but also the taxpayer as the government is committed to helping people with their bills via the Energy Price Guarantee.
When gas and electricity are taken together, the worst rated homes will cost around £1,750 more than EPC band C homes – £950 on household bills, and £800 from the government.
Total energy costs for band F homes are set to be almost £5,500 over the next 12 months, four times the level in summer 2021 before the gas crisis. Government support for band F homes will cost over £2,400 a year – £800 more than if they had been upgraded to band C.
The ECIU says the burden on both households and the public purse could have been significantly less had government not cut support for insulation after 2012. The group says 10 million homes could have been upgraded by now, cutting their gas use by 15-20%, and cutting overall gas demand from homes by 10%.
Previous ECIU analysis, based on earlier price forecasts, found that insulation installed in some homes now would provide payback for the Treasury by around the time of the next election based on price forecasts from August 2022. Even if recent welcome reductions in forecast prices turn out to be correct, the Treasury and the household would be saving over £1,000 between them by the election, and the households would continue saving each year thereafter.
Analysis has also found that deploying heat pumps and insulation is the fastest and most effective way to permanently reduce gas demand, gas imports and heating bills – as opposed to drilling for more UK gas which would not cut demand for gas or the price.
