Homes with the worst energy efficiency will pay substantially more than efficient ones under Ofgem's price cap from 1 October 2024, according to analysis published by the Energy and Climate Intelligence Unit (ECIU) on 23 August 2024. The independent body found that gas bills in homes rated band F on the Energy Performance Certificate (EPC) scale will be on average around £330 a year higher, around 50% more, than homes at the Government's target of EPC band C1.
Taking gas and electricity together, the worst rated homes will cost around £630, or around 40%, more than EPC band C homes. Even homes at EPC band D, described as more typical, face overall bills of around £230, or 15%, more than if they had been upgraded to band C1.
The analysis also sets the figures in the context of the gas crisis that began in September 2021. ECIU estimates that a typical household will pay £600 more over 12 months than before the crisis, taking extra household energy costs to around £4,000 over the four years of the crisis, of which the Government paid £1,400 through the Energy Price Guarantee1. The organisation's figures for the first three years put energy costs per home at £6,800 from Q4 2021, £3,400 above the three years before the crisis, with Government support of around £1,000 through the Energy Price Guarantee and £400 through the Energy Bill Support Scheme1.
Jess Ralston, Energy Analyst at ECIU, said:
"Unfortunately, more volatility in the international gas markets means that we're not out of the woods yet, with bills expected to rise again in the new year. Many households have little resilience left to bear the brunt of further bill increases, so ensuring that they're shielded from future price spikes will surely be a priority for the new Government."
On insulation rates, ECIU says installations have at times over the last decade been 95% lower than the peak of 2.3 million measures a year in 2012. In 2023, 295,000 energy efficiency measures were installed across multiple government programmes, around 85% lower than in 2012. The Great British Insulation Scheme reached its peak level of installations in June 2024 after a short period of near-exponential growth, though ECIU notes this remains significantly below the scheme's target levels1.
| EPC band | Extra annual cost against band C |
|---|---|
| F (gas only) | around £330 (around 50%) |
| F (gas and electricity) | around £630 (around 40%) |
| D (gas and electricity) | around £230 (15%) |
ECIU also cites Government data showing household demand has been suppressed during the gas crisis, with electricity demand around 10% lower in 2022 and 13% lower in 2023, and gas demand around 15% and 20% lower in the same years1. It says some households have been using less energy than would be normal for their home's EPC band because high prices mean they can afford to buy less energy than they need.
Why it matters for households
The gap between bands is a running cost, not a one-off. A home rated band F pays more for the same warmth than a band C home, and the difference is set by the fabric of the building rather than by the supplier or tariff chosen. That makes insulation the main lever on a home's exposure to gas prices, and it is the reason energy efficiency sits at the centre of household energy independence: a better rated home needs fewer units of gas and electricity to reach the same temperature, so a price spike costs it less.
The figures also show how the price cap works in practice. It caps the unit rate, not the bill, so a poorly insulated home can pay well above the headline cap figure while an efficient one pays below it. ECIU's finding that demand has fallen during the crisis points to the other side of the same problem: some households are cutting consumption rather than improving the building, which lowers bills but not the underlying cost of keeping a home warm.
What happens next
ECIU expects prices to rise again in 2025, based on Cornwall Insight estimates for Q1 2025 extended out to Q3 20251. It notes that the Government has increased the budget for the current renewables auction round, and that it remains to be seen whether further support will be added for vulnerable pensioners who will now miss out on the Winter Fuel Payment1. No further detail on insulation scheme funding or targets beyond the June 2024 installation peak has been reported1.