Millions of uninsulated, cold homes face £385 bill ‘hit’ this winter…or switching off

This means that a typical home at the Government’s target Energy Performance Certificate (EPC) band C would pay £900 for gas and electricity over the winter compared to £580 before the crisis.

However, households with poorer energy efficiency, for example those that are not properly insulated, will pay even more. The least efficient homes, rated EPC band F, will pay around £1,290 over the course of the winter, around £440 more than pre-crisis and £385 more than one rated EPC band C.

Even with households cutting energy use this winter, homes in the UK rated EPC band D or worse will collectively pay up to £3.7bn more this winter in gas and electricity bills, compared to if they were all rated EPC C. Of these extra energy costs, £2.4bn would be spent on gas and £1.3bn on electricity.

Commenting on the analysis, Jess Ralston, Energy Analyst at the ECIU, said: “Millions of households are facing higher bills this winter in cold homes that simply leak heat. Investment in improving energy efficiency through government schemes has dropped over the past decade and fallen even further in the first six months of this year. At a time of energy bill crisis, this makes very little sense.

“Insulating a home brings down its bills once and for all, meaning people won’t simply turn off the heating to get by which jeopardises their health. This is why government plans for minimum standards for privately rented homes are so important given they are the coldest and dampest properties.

“All eyes will be on the Budget to see what investment and plans the Government will muster to tackle this and the ongoing energy crisis. Improved efficiency means less gas burnt in boilers and less gas needed from international markets, thereby boosting British energy security.”

However, if demand is not suppressed by 10-15% as a result of higher prices, the findings are even more stark. Winter energy bills would be 75% higher than before the crisis, with a typical home at EPC C paying around £1,000 for energy this winter, compared to around £580 pre-crisis.

The most inefficient homes (EPC F) at higher demand levels would pay around £1,450 this winter, over £600 more than pre-crisis and around £440 more than a more efficient home at EPC band C.

This would take the total cost of inefficient homes this winter up to £4.2bn compared to if they were EPC band C; £2.8bn more for gas and £1.4bn more for electricity.

The latest set of Government statistics about energy efficiency schemes reveals that there has been little progress over the last decade or so, largely after the Government rowed back on energy efficiency schemes significantly in 2012-13. For example, since 2012, insulation rates have dropped by over 90% which has resulted in household bills being higher especially during the gas crisis when high wholesale gas prices forced bills to increase on a huge scale [3].

Pre-election, the Labour party committed to the Warm Homes Plan which aims to upgrade 5 million homes to be more energy efficient, lowering bills and gas demand to improve the UK’s energy security.

Since then, the Government has announced that by the end of the year it will consult on tightening standards in the private rented sector (PRS) so that these homes would have to meet EPC C by 2030. It also set out more details of changes and consolidation of existing energy efficiency schemes – i.e. the Local Authority Delivery and Home Upgrade Grant – to try and boost uptake of measures, for example by: lengthening the delivery window; simplifying the application process; and widening criteria for the minimum required home improvement. It has also confirmed that public sector and social housing energy efficiency schemes will continue.

However, it is thought that more support may be required to tackle the Government’s target of 5 million homes with insulation, as well as boost heat pump uptake which helps to lower the UK’s dependency on foreign gas as the North Sea continues its inevitable decline.

The Government’s manifesto set out plans to introduce other schemes like low interest loans to try and incentivise uptake of energy efficiency and low carbon heat measures, but further details are yet to be set out. In addition, the Government has not yet confirmed if it will press ahead with the Clean Heat Market Mechanism, a policy that would see fossil fuel boiler manufacturers obliged to sell an increasing proportion of electric heat pumps relative to their fossil fuel boiler sales.