Energy UK has urged the UK Government to accelerate efforts to increase energy efficiency of homes in the next Budget, with this regarded as crucial to reducing energy bills.
With the high volatile prices being witnessed within the energy market of current, there is an increasing need to increase energy efficiency in homes due to 80% of gas being used to heat UK homes. Because of this, UK households have been subject to increased energy bills amid the cost-of-living crisis.
Energy UK has indicated that there is a huge opportunity for people to lower their energy bills in the long-term through installing energy efficiency measures such as loft and cavity wall insulation.
The Energy Price Guarantee, which is now included within the Energy Prices Bill, limits the jump in domestic energy bills – which had been estimated to increase to as much as £6,500 – to £2,500 a year for a typical household by capping the electricity and gas units at 34.0p/kWh and 10.3p/kWh respectively, inclusive of VAT for standard variable tariffs. This came into effect at the start of October.
However, Energy UK believes that although these measures had been a necessity to reduce the cost of energy bills this winter, if energy efficiency measures had been successfully implemented, it could already have reduced the cost of energy bills.
The organisation emphasised bill payers and the public purse will spend hundreds of millions of pounds more than they should over the next six months because measures were not put in place ahead of this winter.
“Many homes are wasting gas, and subsequently lots of money, for no reason. We need to avoid making the same mistake for next winter and ramp up the installation of energy efficiency measures now,” said says Louise Shooter, policy manager at Energy UK.
“The turbulence in Government has delayed many policy decisions, but this is not one we can afford to wait on. High energy bills are likely to continue into next year, so the Government needs to get on with it.”
Energy UK also highlighted the inefficiencies with the Energy Company Obligation (ECO) scheme and thus have put forward proposals to stimulate the creation of a commercial market, boost jobs and the supply chain dubbed ECO+.
Analysis indicated that if ECO+ had been fully up and running for the year in the run up to October 2022, it could have improved 702,000 homes with loft and cavity wall insultation.
The improved homes would have spent £280 less on their bills, and each saved the government £120 in Energy Price Guarantee costs – saving a total of £400 per improved home over six months (October 2022 – March 2023). This means in total the taxpayer and households could have avoided unnecessary spends of £85m and £199m respectively on gas this winter.
This comes as the Department for Business, Energy and Industrial Strategy (BEIS) confirmed in late September it would provide £1.5 billion to improve the energy efficiency of 130,000 low-income households across the UK.
Set to be delivered as part of the Social Housing Decarbonisation Fund and Home Upgrade Grant schemes, the government will allow social housing providers and local authorities to submit bids for the funding to reduce energy bills.
At Energy UK’s annual conference 2022, Andrew Ward, chief executive retail at Scottish Power stated that sufficient insulation in buildings could be a primary method to reduce energy bills.
“We have a huge problem ahead of us this winter and a significant problem to get out of this. But there are so many opportunities around domestic homes to save energy. One crucial method is to better insulate houses; however, we (at Scottish Power) will only be able to insulate 3,000 homes this year – it is not enough,” Ward said.
Angela Terry, CEO and founder of energy consumer awareness group One Home also detailed the potential of insulating homes to the Energy UK audience having said that currently “insulation and energy efficiency are not being talked about enough during the energy crisis”. This could also be recognised as a long-term strategic investment, something that has been severely lacking in response to the current crisis.