- Energy price cap to rise by 10%, effective October 1
Some of Britain’s least energy-efficient homes could see their annual energy bills rise by more than £550 from the start of October, according to Rightmove.
Energy bills are set to rise by 10 per cent in October. The average household currently pays bills of £1,568 a year, with prices capped by Ofgem’s energy price cap, but this figure will rise to £1,717 from 1 October.
While this will add an extra £149 per year to the average annual bill, homes with the worst insulation and energy performance will see costs skyrocket.
Check your EPC: October’s energy price cap rise could mean a £558 annual increase for households in the least energy-efficient homes
The energy performance of a home is assessed by an Energy Efficiency Certificate (EEC).
EPC is a rating system that classifies properties between A and G, with A being the most energy efficient and G being the least efficient.
According to Rightmove, at least 18 million homes have an energy performance rating of D or lower, equivalent to 55 percent of the total housing stock.
Someone living in a home with an EPC rating of A could see their average annual bill rise by £56 once the price cap changes.
But someone living in a G-rated home, which will typically be poorly insulated and have appliances such as a boiler that are not energy efficient, could pay almost ten times that amount, £558.
Someone living in a D-rated property can expect their annual bill to rise by between £225 and £2,471, while someone living in an E-rated home will see their annual bill rise by £319 on average.
The obvious way for homeowners living in energy-inefficient homes to reduce their bills is to make improvements.
Green improvements, if appropriate for the home, could include window upgrades, roof or floor insulation, installing solar panels, or switching from a gas boiler to a heat pump.
However, all of these improvements cost money and homeowners may have to wait years to see any return on their investment.
Of course, there are much more affordable improvements that can be made, such as sealing windows or installing energy-efficient LED lights.
Many of these cheaper solutions pay for themselves in a short time, given the energy savings they can provide.
Cost-effective: Upgrading to double-glazed windows could reduce annual bills for those living in less energy-efficient homes, but they may have to wait years to see a return on investment.
There is also talk that Ofgem will introduce a more dynamic price cap, where the price of energy varies at different times of the day.
At the beginning of the year, the energy regulator set out this possible change in the price cap in the future.
This could mean that energy is cheaper at less popular times of the day or when renewable energy generation increases.
Nearly three-quarters of people would be willing to change how and when they use energy if it meant being able to access cheaper energy rates at different times of the day, according to a survey by Rightmove.
Tim Bannister, property expert at Rightmove, said: ‘Rising energy prices in recent years mean renters and landlords are likely to need to closely consider their total monthly outgoings when choosing their next home.
We know that lower bills are one of the biggest motivators for people to go green, so we expect that over time people will increasingly look for more energy efficient properties to keep bills down in the long term.
‘Our research suggests that if something like a dynamic price cap were introduced, where energy was cheaper at less popular times of the day, most people would welcome it if it meant lower bills.’
