Personal Finance

Energy bills £600 higher for badly-insulated homes under new price cap

Gas bills in poorly insulated homes will be 50% higher than homes that meet the Government energy efficiency target, new analysis shows.

Households will pay £340 more on their gas, plus almost as much on electricity for homes rated band F on the Energy Performance Certificate (EPC) scale, compared to those in band C.

In total, gas and electricity bills will be £600 more expensive in the worst-rated homes, the Energy and Climate Intelligence Unit (ECIU) estimates.

Jess Ralston, Energy Analyst at ECIU, said: “For millions living in cold, leaky homes, insulation is crucial for lowering bills. But with energy independence remaining a top concern for the public and politicians alongside the cost of living, insulation is now also key to reducing our demand for gas. Unless we start to use less gas, we’ll just have to import more from abroad as the North Sea continues its inevitable decline, regardless of new licenses."

Using the new energy price cap for April 2024, analysis suggests even homes with an average energy efficiency level of band D will pay £230 - 15% - more than if they had been upgraded to band C levels.

ECIU research shows the insulation rates have dropped considerably since 2012 when there were 2.3 million measures rolled out. Last year, just 295,000 energy efficiency measures were installed, down 85% on 2012.

How can you improve energy efficiency? Energy efficiency and home insulation measures include:

  • Heat pumps
  • Solar panels
  • Wall insulation
  • Loft, roof, underfloor insulation
  • Single glazing replacement
  • Underfloor heating
  • Upgraded boiler
  • Energy efficient lighting (eg LED bulbs)

In September Prime Minister Rishi Sunak scrapped plans to force private landlords to ensure properties had a minimum level of energy efficiency.

Ms Ralston added: "Government insulation schemes are not delivering at target levels and fixing them does not seem to be a priority, despite the bill and energy security benefits. The next Government, whatever colour it is, rapidly needs to increase deployment of energy efficiency measures if it wants to gain energy independence and lower bills.”

A Department for Energy Security and Net Zero spokesperson said: "Nearly half of all homes in England now have an EPC rating of C or above, up from just 14% in 2010.

"We have allocated £20 billion for energy efficiency over this Parliament and next - helping cut bills for those families who need it most.

"Our investment will raise insulation standards of around 500,000 homes across the UK."

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Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


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