Britons are being urged to transition their homes into using “net zero” technologies as they could be in for a sizable saving on their energy bills. Experts are predicting that costs could rise by hundreds of pounds next month even if Chancellor Jeremy Hunt does not raise the energy price guarantee.
The Energy and Climate Intelligence Unit (ECIU) has found that an average household could be paying £285 more in the year from April than in the previous 12 months.
This is even if Jeremy Hunt keeps the energy price guarantee at its current level and does not go ahead with previously announced changes.
This latest research highlights that some peoples’ energy bills will be £1,100 higher than before the cost of living crisis despite the ongoing drop in the price cap.
Specifically, people living in private rented accommodation that meets only the minimum allowed standard sector will be paying nearly £1,250 next month compared to before the current rise in the cost of living.
Notably, the ECIU discovered that privately rented homes were among the most inefficient when it comes to energy efficiency and affordability.
Social housing tenants are more likely to benefit from greater insulation and could be almost £500 better off than those in the worst private rental homes, according to the research.
The ECIU found that “net zero homes”, which adopt technologies like heat pumps and solar panels will see their energy bills be at just 60 percent of the UK average.
This would mean those living in these homes would be paying around £925 less a year compared to most homes.
It should be noted that wholesale gas prices are still at least twice the level from before the cost of living crisis and are expected to stay above pre-crisis levels for the rest of the decade.
Dr Simon Cran-McGreehin, the head of analysis at ECIU, broke down who will be worse hit by energy bill rises in the coming years.
He explained: “Households renting from private landlords are often being hit worst by the gas crisis, living in poorer quality homes with their hands tied, unable to substantially improve their efficiency.
“Meanwhile, net zero homes that were able to invest in solar and insulation are not only saving themselves money but the taxpayer too.
“With the government having failed to confirm better energy standards for privately rented homes, more households will enter next winter locked into higher bills yet again.”
Last month, Ofem announced that the energy price cap will drop £3,280 from £4,279 from April 1 to June 30, 2023.
Through the energy price cap, the amount a household’s supplier can charge them while they are on a default tariff is restricted.
Over the last year, the price cap has risen substantially due to external pressures on the wholesale gas and electricity market pushing up costs.
In response to this, the energy price guarantee was introduced by the Government to cap the amount the average household is charged annually at £2,500.
It should be noted that the price guarantee does not cap all energy bills but limits the price per unit of gas and electricity for homes with average usage.
Last year, Chancellor Jeremy Hunt confirmed that the price guarantee would be raised from £2,500 to £3,000 come April.
If implemented, households with average energy usage would see their energy bills rise by around £500.
However, recent reports suggest the Government is looking to scrap these plans and maintain the energy price guarantee at its current level.