Energy bill price cap: poorly insulated homes to cost over £400 more to heat next year

Whilst households living with the worst energy efficiency are facing the highest bills, even those in an average home, EPC band D, are facing bills of around £280 more than if they had been upgraded to the Government’s target of band C.

Jess Ralston, Energy Analyst at ECIU, said: “For millions of people living in leaky homes, 2024 will mean being colder and poorer. The real kick in the teeth is that existing Government insulation schemes started to flatline just as the gas crisis caused bills to soar, despite having worked well in the past. There was an opportunity to boost energy efficiency in the Autumn Statement, but it was not even mentioned, and the PM’s recent decision to scrap insulation requirements for landlords means renters are now locked into higher energy bills for years to come.

"Investing in insulation rather than simply subsidising gas bills over the gas crisis could have shielded households from future volatility in gas prices. And it would bring more energy independence as it reduces our reliance on gas imports. Instead, gas prices are set to stay two to three times higher for the rest of the decade, and we’re still vulnerable to interference from figures like Putin. Many people will be wondering what the UK’s approach is to energy security and lowering bills, because at the moment, the plan seems confused at best.”

On average, total energy costs are set to be around 1.7x the level in summer 2021 before the gas crisis [2]. Households will also be worse off as the Government’s £400 Energy Bill Support Scheme has come to an end.

Insulation rates over the last decade have been 90% lower than their peak of 2.3 million measures per year in 2012, coinciding with then Prime Minister David Cameron deciding to “cut the green crap”, and were just 95% of that level at 160,000 in 2022. So far in 2023, only 100,000 measures have been installed, so 2023 could see even lower numbers in total [3].