Yahoo Finance Gas and electricity bills: 6 million families face £320 rise
Millions of Brits are facing higher heating bills when the the energy price cap jumps in April, adding to the cost of living crisis gripping the nation.
According to a new study by the Resolution Foundation, annual heating bills for families living in the UK’s 4.2 million E-rated homes will rise "at least" £320 more than those living in EPC C-rated homes when the price cap rises in April.
Those living in the 1.5 million F-G-rated homes will face a surcharge of £390. The total cost across all D-G-rated homes will be £3.9bn.
EPC is a rating scheme which bands homes between A and G, with an A rating being the most efficient and G the least efficient.
The Climate Change Committee is proposing all UK homes reach an EPC of band C in order to help the government meet its net zero carbon target by 2050.
Its Shrinking Footprints report examines how the next stage of the UK’s net zero transition will directly affect families via the homes they live in, the cars they drive, and the food they eat.
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The Resolution Foundation says there need to be accessible charging network and home efficiency upgrades to ensure that everyone benefits from using them.
"The government’s ‘prime-pumping’ strategy of requiring new builds to have heat pumps from 2025, while subsidising some wider early adoption, should boost take-up and help achieve the target for heat pump costs to equal those for gas boilers by the end of the decade — a target backed by industry experts," it said.
However, it says heat pumps are "less effective" in poorly insulated homes, and 80% of the investment in home insulations will be needed by 2035.
Despite this, the number of roofs and walls being insulated at the moment is down 90% compared to a decade ago. As such, "a clear priority is to reverse the previous decade of abject policy failure on home insulation", the report says.
Poorly insulated homes have always cost more to heat, but the scale of this "leaky homes surcharge" will surge when the energy price cap rises in April.
The UK government plans to better insulate private rented properties by requiring homes to attain a C-rating by 2028. But there is currently no plan to cover home owners.
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This is a particular challenge for low-income homeowners, says the report, 72% of whom will need their homes improved, and where the potential cost of insulation upgrades (£8,600) are just £500 less than their annual after housing costs incomes (£9,100).
The report says that while the focus has been on the kit used to reduce emissions in these areas such as battery electric vehicles (BEVs) and heat pumps, the "most significant challenges" will be delivering the infrastructure around these technologies.
The Resolution Foundation notes that the rapid take-up of BEVs shows that the UK is well-placed to make progress on cutting emissions, and delivering significant cost savings for road users.
For example, the cost of charging a BEV via public charging points is £712 a year — 25% less than the equivalent cost (in terms of mileage) of filling up a petrol car (£1,100 a year).
Charging costs can be further reduced through home-charging (£389), and overnight home-charging (£139).
But, the cost differences risk creating a new "charging divide" — as those without off-street parking could "miss out on hundreds of pounds of annual savings" compared with home-owners. Some 81% of home-owners have off-street parking, compared with 51% of private renters.
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Jonny Marshall, senior economist at the Resolution Foundation, said: "Until now, Britain’s net zero transition has largely been hidden from households. This will change in the 2020s as our carbon footprints are reduced via the homes we live in, the cars we drive, and the food we eat.
"Much of the focus has been on take-up of low-carbon technologies like electric vehicles and heat pumps. But the key to their success will ultimately depend on delivering the infrastructure around them — such as better insulating Britain’s housing stock.
"This long-term insulation challenge will be brought home to households very soon when energy bills rise by 50 per cent in April. Almost 6 million households will face a £320 ‘leaky homes surcharge’ on their energy usage as a result.
"It is vital that the government ramp up progress in insulating homes and reducing the costs of public charging points for electric vehicles so that the whole of society can benefit financially from a low carbon economy."
