Bill payers £285 worse off come April, even if energy price guarantee maintained

New analysis from the Energy and Climate Intelligence Unit (ECIU) has found that an average household could be paying £285 more in the year from April than in the previous 12 months, taking their bills to £1,100 above the pre-crisis level. This will happen despite ongoing falls in the price cap. [2]

Those living in private rented accommodation that meets only the minimum allowed standard (EPC band E) sector will be paying almost £1,250 more for their energy bills come April compared to before the current gas crisis. Private rented homes are among the most inefficient, whereas social housing tenants are more likely to benefit from greater insulation and could be almost £500 better off than those in the worst private rental homes.

For those living in ‘net zero homes’ with good insulation, a heat pump and solar panels, their energy bills will be just 60% of the UK average, paying £925 less a year than the average. These homes are consequently reducing the burden of the taxpayer-funded Energy Price Guarantee which is subsidising the high cost of gas. They are effectively saving the exchequer £260 each over two years, compared to the UK average home.

Although the wholesale gas price has fallen in recent months, it is still at least twice the level from before the crisis, and is predicted to stay above pre-crisis levels for the rest of the decade. [3]

Dr Simon Cran-McGreehin, Head of Analysis at ECIU, said: “Households renting from private landlords are often being hit worst by the gas crisis, living in poorer quality homes with their hands tied, unable to substantially improve their efficiency. Meanwhile, net zero homes that were able to invest in solar and insulation are not only saving themselves money but the taxpayer too.

“With the government having failed to confirm better energy standards for privately rented homes, more households will enter next winter locked into higher bills yet again.”

In early 2021, the Government consulted on proposals that would see the Minimum Energy Efficiency Standards (MEES) in the private rented sector increased to meet Energy Performance Certificate (EPC) band C for new tenancies from 2025 and all tenancies from 2028 [4]. To date, there has been no Government response to this consultation.

Rooftop solar panels are paying for themselves in just over six years, leaving a likely remaining lifespan of 19 years when the electricity generated is essentially free [5].

In addition, households with a small to mid-sized EVs are saving around £500 to £800 a year on running costs compared with internal combustion engine (ICE) equivalents. [6]

Previous ECIU analysis, the Cost of Not Zero, also found that delays in deploying renewables, insulation, rooftop solar panels, heat pumps and electric vehicles could have left some households paying an extra £1,750 on bills in 2022 [7].