The government's £400 Energy Bill Support Scheme has come to an end, the Energy and Climate Intelligence Unit (ECIU) said on 23 November 2023, in analysis published the same day1. The ECIU said households "will also be worse off as the Government's £400 Energy Bill Support Scheme has come to an end"1. The scheme is one of the closed energy bill support payments that previously reduced household bills.
The ECIU analysis, using prices under Ofgem's price cap for January 2024, found that gas bills in homes rated band F on the Energy Performance Certificate (EPC) scale will be on average £415, or 50%, a year higher than homes at the government's target of EPC band C1. Taking gas and electricity together, the worst rated homes will cost around £730, or 42%, more than EPC band C homes1. Homes at EPC band D, described as average, face bills of around £280 more than if they had been upgraded to band C1. The ECIU noted that band F homes have higher energy use than worse rated band G homes, because band G homes often include secondary heating sources such as a biomass boiler1.
| EPC band | Annual cost compared with band C |
|---|---|
| F (gas only) | £415 (50%) more |
| Worst rated (gas and electricity) | £730 (42%) more |
| D (gas and electricity) | £280 more |
On insulation, the ECIU said rates over the last decade have been 90% lower than their peak of 2.3 million measures per year in 2012, a peak it links to then Prime Minister David Cameron deciding to "cut the green crap"1. It said rates were 160,000 in 2022, and that only 100,000 measures have been installed so far in 2023, so the year could see even lower numbers1. The ECIU also said the Prime Minister's recent decision to scrap insulation requirements for landlords means renters are "now locked into higher energy bills for years to come"1. Current support for insulation sits under ECO4, while older schemes such as the Green Deal and the Domestic Renewable Heat Incentive are closed.
"Investing in insulation rather than simply subsidising gas bills over the gas crisis could have shielded households from future volatility in gas prices. And it would bring more energy independence as it reduces our reliance on gas imports."
The ECIU said total energy costs are set to be around 1.7 times the level in summer 2021, before the gas crisis, based on a pre-crisis average price cap dual fuel bill of just over £1,100 for January 2019 to September 20211. It said gas prices are set to stay two to three times higher for the rest of the decade1.
Why it matters for households
The end of the £400 payment removes a fixed reduction from bills at the same time as the January 2024 price cap takes effect, so the amount a household pays depends more heavily on how much gas and electricity it uses. That use is shaped by the fabric of the home: the ECIU figures put the gap between a band F home and a band C home at £415 a year on gas alone, and £730 across both fuels1. For a household, the practical link between the energy performance of the building and the size of the bill is therefore direct, and it persists after the support payment has gone. The ECIU frames insulation as a route to lower reliance on gas imports, which is the connection between the energy bills a household pays and energy independence at national level.
What happens next
The ECIU analysis uses prices under Ofgem's price cap for January 2024; final values for the whole year are not yet known, but are forecast to be similar or only slightly lower than the first quarter values1. No replacement for the £400 Energy Bill Support Scheme has been reported. The ECIU said there was an opportunity to boost energy efficiency in the Autumn Statement, but it was not mentioned1.