It’s two months until gas and electricity bills go up again, and five till the coldest part of the year. With some families unable to afford the cost of boiling potatoes, even people on middle incomes could struggle to pay the predicted £285 per month that a combined gas and electricity bill could cost from October. Last winter the average monthly bill was £106.*
Handing out money for gas bills – the government’s current policy – is a short-term solution, but with prices unlikely to come down in the next few years there are much better ways the government could use the money.
Cheaper than subsidising gas? Not using it at all. That’s where insulation comes in. We take a spin through the average British house to look at how heat leaks and how insulation can save money – and slash Britain’s carbon emissions.
Insulation projects have plummeted since 2012
In addition to putting pressure on family budgets, burning gas and oil to heat homes causes 16% of all UK greenhouse gas emissions, according to figures from the Department for Business, Energy and Industrial strategy.
Insulation would help with both of these problems.
But insulation projects have plummeted in the UK in the last 10 years.
David Cameron’s 2013-15 green deal policy to increase insulation had no money behind it.
The green homes grant scheme was introduced in 2020, but the administration - contracted out to a US consultancy, was “botched”, according to Juliet Phillips of climate thinktank E3G. So despite huge interest, hardly anyone has been able to get vouchers.
Cameron also scrapped more rigorous standards for insulation and energy efficiency in new homes due to come into force in 2016, meaning that at least 1.5m homes have been built to standards that are inadequate for the country’s 2035 goals and will need to be retrofitted. And retrofitting comes at a much higher cost than building in energy efficiency from the start.
This constant change has damaged the insulation industry. “There has been this boom-bust policy making which has really decimated the industry,” says Phillips.
The government has ambitious climate plans – for example, phasing out all gas boilers in homes with electricity-powered heat pumps by the late 2030s. If the electricity generation is green, then the technology is there for British homes could be net zero by 2035. But heat pumps won’t work well unless the houses are properly insulated.
And with no replacement policies or cash, that leaves many of Britain’s homes without simple insulation – unnecessarily cold, expensive to heat and pumping out carbon emissions.
Here’s the scale of the challenge ahead:
How could it work?
“There’s no silver bullet,” says Phillips. “There is such a diverse range of houses and households – from families living on the breadline in fuel poverty, through to people who are well-off.”
Her thinktank, E3G, suggests a range of measures, from refitting all social housing and poorer owner-occupied houses through to green mortgages and stamp duty holidays for those at the wealthier end of the spectrum.
Other ideas include devolving the power and funding to local councils, an approach recommended by the Climate Change Committee. with clear goals to insulate a certain number of homes by a certain date. Going street by street and making it easier to opt-in rather than to opt out could all incentivise takeup. Although recent Conservative governments don’t have a good track record of working with local authorities on these issues.
And then there are the the people needed to do the work: fitting solid wall insulation, maintaining heat pumps, fitting solar panels, and building new buildings to level A energy-efficiency specifications.
And that’s an opportunity as well as a problem, says Phillips. “We need to think about skills and supply chains and how we get the industry doing a lot of more retrofits than it already is.
“We’re calling for an Olympic-style employment and skills taskforce – we should be doing the same right now for energy efficiency to train up those workers.”
Note on the data
*The October price cap will be announced by Ofgem in August, and will set the price of energy bills for most people – those on price-capped standard tariffs from 1 October to 31 December 2022. In May Ofgem predicted the price cap would be £2,800 annually (£232 monthly) for a household with medium energy consumption – defined as using 12,000 kWh of gas and 2,900 kWh of electricity per year.
Currently it is £1971 annually - £164.25 a month.
Management consultants BFY suggested in July that the price cap could be as high as £3,420 from October – £285 a month – due to Russia’s decision to cut gas supplies to Europe.
• This article was amended on 1 August 2022 to correct instances where figures originally given in millimetres had been out by a factor of 10 when converted to centimetres.
