The Spring Budget announced that the Energy Price Guarantee (EPG) would be extended at the same level for an additional three months, from April to the end of June 20231. Under the scheme, a typical household's energy bills are brought down to around £2,500 per year until the end of June 20231.
The extension sits alongside a fall in the energy price cap. From 1 January to 31 March 2023 the cap was £4,279, and from 1 April the cap is £3,280 for a dual fuel household paying by direct debit based on typical consumption, a reduction of almost £1,0001. The government describes the EPG as still protecting consumers from high prices, with the guarantee bringing a typical household's bills down to around £2,500 a year1. The Energy Price Guarantee therefore remained the figure that determined what a typical household paid, rather than the higher cap.
The same document sets out a separate scheme intended to reduce bills over a longer period. The Great British Insulation Scheme, previously consulted on as ECO+, will run from 2023 to 2026 in England, Scotland and Wales1. It is estimated to make around 300,000 homes more energy efficient, primarily through insulation measures such as cavity wall insulation, and those receiving insulation upgrades are expected to see bills reduce by around £300 to £400 on average per year1. The scheme is predicted to be delivered by around 2,000 installers per year in the final two years across Great Britain1.
Eligibility is split into two groups, with a minimum of 20% of the support provided through the scheme going to low-income and vulnerable households1. The general group covers homes with an EPC rating of D to G within Council Tax bands A to D in England and A to E in Scotland and Wales; eligibility in Wales was expanded from bands A to C as consulted on1. The low-income group covers homes with an EPC rating of D to G and broadly mirrors the household eligibility requirements of ECO4, being on means tested benefits or living in the least efficient social housing1. At least 20% of each supplier's annual phase target must be delivered to households in the low-income group1.
"The Spring Budget announcement that the EPG will be extended at the same level for an additional three months from April to the end of June 2023"
Why it matters for households
The EPG extension fixed the level of support for a further three months at a point when the price cap had fallen below the guarantee. For a household on typical consumption, the guarantee, not the cap, set the bill at around £2,500 a year to the end of June 20231. The gap between the two figures, almost £1,000 on the cap from 1 April1, is the measure of what the guarantee covered over that period. What a household actually pays still depends on how much energy it uses, since the typical household figure is based on typical consumption rather than a cap on the total bill, and standing charges and policy costs and levies sit alongside the unit rate.
The insulation scheme addresses the other side of a household's position: how much energy a home needs in the first place. The estimated £300 to £400 annual reduction for homes receiving insulation upgrades1 is a lasting change to demand rather than a temporary discount, which is the part that bears on a home's energy independence. The scheme's split between a general group and a low-income group, and the 20% minimum for the latter1, determines which households can access that work. The document does not report the rates at which households in each nation will be able to apply, beyond the Council Tax band boundaries set out above1.
What happens next
The government said it planned to launch a self-referral service in summer 2023 as part of GOV.UK, intended to include the scheme and other complementary energy schemes1. It also said it would lay affirmative regulations in Parliament, expected to come into force later this year1. Suppliers were permitted to begin delivering measures ahead of the legislation coming into force, from the date the response was published, though the government said it would not allow acceptance of measures delivered ahead of publication of the response1.
Sources1 cited
- Great British Insulation Scheme (2023-2026) and Amendments to ECO4 regulations: government response, assets.publishing.service.gov.uk