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

Homes rated band F on the Energy Performance Certificate (EPC) system set to have a gas bill £968 higher than band C.

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By George Smeeton

info@eciu.net

Information on this page correct as of:

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.

Table 1. Annual energy bills by EPC band. EPC band G homes have lower energy bills than EPC band F because of the way in which the EPC is calculated, and EPC band G homes often use other secondary sources of heat such as biomass.
Energy Performance Certificate bandAnnual electricity bill 2022/23 (estimate, £)Annual gas bill 2022/23 (estimate, £)Annual total energy bill (estimate, £)Extra annual bill payments compared to EPC band C (£)
EPC C2,0701,8063,877
EPC D2,2492,2264,474598
EPC E2,6052,5815,1861,309
EPC F3,0802,7745,8541,978
EPC G3,2582,3225,5811,704

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]


Note to editors:

  1. ECIU analysis based on Cornwall Insight estimates for the October 2022 and January 2023 price cap. https://www.cornwall-insight.com/press/price-cap-forecasts-for-january-rise-to-over-4200-as-wholesale-prices-surge-again-and-ofgem-revises-cap-methodology/
  2. https://www.bloomberg.com/news/articles/2022-07-29/uk-scales-back-1-billion-funding-to-help-homes-cut-energy-use
  3. https://gemserv.com/our-thoughts/proposed-energy-efficiency-scheme-eco-plus/
  4. How to cut the UK’s dependency on Russian gas… permanently (ECIU, March 2022): https://eciu.net/analysis/briefings/how-to-cut-the-uks-dependency-on-russian-gas-permanently
  5. Insulation installed over last decade saving Brits £1.2bn a year https://eciu.net/media/press-releases/2022/insulation-installed-over-last-decade-saving-brits-1-2bn-a-year

For more information and media bookings:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, Email: george.smeeton@eciu.net