The Energy and Climate Intelligence Unit (ECIU) published analysis on 25 August 2023 estimating what households in each Energy Performance Certificate (EPC) band will pay for gas and electricity under Ofgem's October 2023 price cap, forecast at £1,923 a year for the average home1.
The analysis found that homes rated EPC band F are set to have bills £721 higher than a home rated EPC band C, which ECIU describes as the Government's target for 20351. The average UK home is rated band D, and ECIU estimates these homes will pay £275 more this winter than a band C home1.
| EPC band | Gas bill | Electricity bill | Total bill | Difference to band C |
|---|---|---|---|---|
| A | £765 | £894 | £1,658 | -£101 |
| B | £700 | £894 | £1,593 | -£166 |
| C | £808 | £951 | £1,759 | N/A |
| D | £996 | £1,037 | £2,033 | £274 |
| E | £1,141 | £1,124 | £2,264 | £505 |
| F | £1,213 | £1,267 | £2,480 | £721 |
| G | £1,025 | £1,296 | £2,321 | £526 |
ECIU notes that band G homes show lower energy bills than band F because of the way the EPC is calculated, and because band G homes often use other secondary sources of heat such as biomass1. The figures are based on Ofgem's Typical Domestic Consumption Values, and ECIU notes that rounding means Ofgem's TDCV is £2 more than Ofgem's own figure1.
Jess Ralston, Energy Analyst at ECIU, said:
"Those in the most inefficient homes could pay around £720 more on bills over the next year than those in energy efficient ones. We could have spent the last year insulating houses to shield them from future gas price spikes, and building more British renewables so we need to buy less expensive gas on the open market."
ECIU states that wholesale gas costs are set to remain two to three times higher than pre-crisis levels for the foreseeable future, and that around 40% of the UK's electricity is generated by gas, which usually sets the price for all generation1. It adds that as more cheaper renewables are built, such as offshore wind farms, the price of electricity is expected to fall1. ECIU also cites its earlier analysis that energy efficiency schemes such as ECO have contributed to savings of £1.2bn per year under current prices1.
Why it matters for households
The gap between bands is the practical measure of what a home's fabric costs its occupants under a given price cap. On these figures, the difference between a band F and a band C home is £721 a year, and between the average band D home and band C, £2751. That difference sits alongside the standing charges and unit rates that determine what any individual household actually pays, which is why a bill can differ from the headline cap figure; see why is my bill higher than the price cap figure?.
Because gas sets the price of electricity for most generation, according to ECIU, a home's exposure to gas prices runs through both fuels, not just the boiler1. That links the efficiency of the building to the wider question of energy bills and energy independence. ECIU's position is that using less gas is the key to lower bills and energy security1. Households wanting to understand the scale of potential savings from fabric measures can read how much could I save by improving my home's energy efficiency?.
What happens next
The October 2023 price cap takes effect from October 20231. ECIU states that getting the Government's "flagship insulation scheme" back up and running could help people in time for this winter, and that tightening energy efficiency regulations for private renters and lifting the ban on onshore wind could help in time for next winter1. No further dated steps are set out in the analysis.