Poorly insulated homes will be sent annual gas bills about £340 – around 50% - higher than those with a C-rated Energy Performance Certificate (EPC) under Ofgem’s latest price cap, new research has found.

Analysis from the Energy and Climate Intelligence Unit (ECIU) reports that with the gas crisis inflating power prices, when gas and electricity are taken together, homes with an F-rated EPC will pay about £600 (40%) more. Even those in an average home - EPC band D - face overall bills of £230 (15%) more than if they had been upgraded to the government’s target of band C.

Scrapped

In September, Prime Minister Rishi Sunak scrapped Minimum Energy Efficiency Standards for the private rented sector, which the unit says could leave 2.8 million privately rented households colder and poorer.

A recent poll by Rightmove found a big fall in landlords planning to make improvements to their properties; in 2022, more than a third (36%) aimed to fund work to improve homes rated below an EPC grade C, but in late 2023 this had dropped to 26%.

To meet UK climate change targets, the government wants to install 600,000 low-carbon heat pumps annually by 2028. However, only 55,000 heat pumps were sold in the UK in 2022 amid warnings that they are still too expensive and misunderstood.

ECIU energy analyst Jess Ralston says insulation is crucial for lowering bills and for reducing gas demand.

She adds: “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.”

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