Under Ofgem's price cap from April 2024, gas bills in homes with poor insulation, rated band F on the Energy Performance Certificate (EPC) scale, will be on average around £340, or around 50%, a year more than homes at the Government's target for home energy efficiency of EPC band C, according to analysis by the Energy and Climate Intelligence Unit (ECIU)1. The findings were published on 27 March 2024 and dated 1 April 20241.
When gas and electricity are taken together, the worst rated homes will cost around £600, or around 40%, more than EPC band C homes1. Even households in an average home, EPC band D, face overall bills of around £230, or 15%, more than if they had been upgraded to band C1.
The analysis uses prices under Ofgem's price cap for April 2024, applying them to a whole year's demand for different EPC bands, in keeping with Ofgem's approach of calculating illustrative bills using annual typical consumption, which is approximately EPC band D1. ECIU notes that a household's overall energy costs in 2024 will likely be higher than those based on second quarter prices, because prices were higher in the first quarter and are forecast to rise again later in the year1. Gas and electricity consumption data are median values for homes in each EPC band1. ECIU also notes that band F homes have higher energy use than worse rated EPC band G homes, because EPC G homes often include secondary heating sources such as a biomass boiler1.
| EPC band | Gas bill compared with band C | Gas and electricity combined compared with band C |
|---|---|---|
| F | Around £340 (around 50%) more | Around £600 (around 40%) more |
| D | Not given | Around £230 (15%) more |
On insulation rates, ECIU says that at times over the last decade insulation rates have been 95% lower than their peak of 2.3 million measures per year in 2012, coinciding with then Prime Minister David Cameron deciding to "cut the green crap"1. In 2023 just 295,000 energy efficiency measures were installed across multiple government programmes, around 85% lower than in 20121. The figure covers measures installed under the Energy Company Obligation, the Great British Insulation Scheme and the Social Housing Decarbonisation Fund1.
ECIU also states that in September the Prime Minister Rishi Sunak scrapped Minimum Energy Efficiency Standards for the private rented sector, which could leave 2.8 million privately rented households colder and poorer, with nearly 250,000 households found in the most marginal seats in the last Election1.
"For millions living in cold, leaky homes, insulation is crucial for lowering bills. But with energy independence remaining a top concern for the public and politicians alongside the cost of living, insulation is now also key to reducing our demand for gas. Unless we start to use less gas, we'll just have to import more from abroad as the North Sea continues its inevitable decline, regardless of new licenses."
Why it matters for households
The gap between bands is a running cost, not a one-off. On this analysis, a band F home pays around £340 more a year for gas alone than a band C home under the same price cap, and around £600 more across both fuels1. That difference sits with the fabric of the home: how much heat escapes through walls, roofs, floors, windows and doors, which is what the EPC band reflects. The energy efficiency of the UK housing stock therefore shapes what a household pays, and the price cap sets the unit rates those losses are charged at. Ofgem's role in setting that cap is set out in our guide to what the energy regulator does.
For a household, a poorly insulated home means more gas bought to reach the same warmth, so a larger share of the bill is exposed to wholesale gas prices. ECIU frames this as an energy independence question as well as a cost one: using less gas reduces the volume that has to be imported as North Sea production declines1. The link between household bills and import dependence is covered in energy bills and energy independence. What insulation measures save, and over what period, is set out in how much insulation saves on energy bills, and indicative figures for improvements are in how much could I save by improving my home's energy efficiency.
For privately rented homes, the standards that would have required landlords to improve properties were scrapped in September, according to ECIU, which says this could leave 2.8 million privately rented households colder and poorer1. The background to those rules is in MEES: Minimum Energy Efficiency Standards for rented homes, and the separate Scottish framework is covered in energy efficiency standards for privately rented homes in Scotland. Support for households in energy debt, including the British Gas Energy Trust, is covered in our guide to grants for energy debt, and Northern Ireland's separate market in energy bills in Northern Ireland.
What happens next
The April 2024 price cap takes effect from 1 April 20241. ECIU states that prices were higher in the first quarter of 2024 and are forecast to rise again later in the year, so a household's overall energy costs in 2024 will likely be higher than figures based on second quarter prices1. No further dated steps are given in the analysis.