Poorly insulated homes to pay £1,000 more on gas bills this winter

There is an updated version of this release now available.

With the dual fuel price cap forecast to reach £3,958 this winter [1], new analysis by the Energy and Climate Intelligence Unit (ECIU) has found homes rated band F on the Energy Performance Certificate (EPC) system, a measure of the home’s efficiency, are set to have a gas bill £968 higher than a home rated EPC band C, the Government’s target for 2035.

The average home in the UK is rated band D and these homes will pay £420 more for their gas this winter, compared to an EPC band C home.

Wholesale gas costs are set to have added around £2,500 to energy bills during the gas crisis. This includes electricity as high wholesale gas prices currently have a knock-on effect in the power market as some electricity is still generated from gas, and the current market design means that has also sets the price for some other generators.

When gas and electricity bills are taken together, those living in the worst rated homes will pay almost £2,000 extra compared to EPC band C, and the average EPC band D homes will pay almost £600 extra.

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.”

It has been reported that the Government recently decided not to go ahead with doubling the ECO scheme, which was a proposal developed by the energy industry [2]. A recent industry survey by Gemserv [3] showed that 80% installers say they have capacity to take on 25-50% more work, and 96% expect job creation from an ECO Plus scheme.

Previous ECIU analysis has shown 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. [4]

ECIU analysis has also found that energy efficiency schemes such as ECO have contributed to savings of £1.2bn per year under current prices, which will rise further under higher winter prices. [5]