The government’s failure to invest in insulating homes and increasing low-carbon tech has cost households up to £1,900 a year on their energy bills, a new report by the Energy and Climate Intelligence Unit (ECIU) suggests.
Policy delays and lack of government funding for net zero upgrades, including home insulation, heat pumps, solar panels, electric vehicles (EVs), and renewable energy, have cost the government and homeowners an extra £70 billion in energy costs over the past decade or so.
The ECIU report accuses the government of scrapping successful schemes that would have helped households with the cost of solar panel installation and insulation, and watering down policies that encourage heat pump and electric car uptake.
Examples include reversing the gas boiler ban, which would have made the sale of new gas boilers illegal from 2035, and pushing back the ban on the sale of new petrol and diesel cars from 2030 to 2035.
If more home insulation measures had been carried out, more low-carbon tech installed, and more renewable energy generated, UK households would have been better protected during the energy crisis, the ECIU report argues.
Speaking to The Independent, a Department for Energy Security and Net Zero spokesperson said the figures in the ECIU report were “highly speculative”, that the government was “helping families to make [energy efficient] changes”, and that the UK was a world leader in renewable energy.
The cost of slow progress on home insulation
Missed insulation upgrades have cost UK households an average £235 a year on their energy bills, according to the ECIU.
The report states that there have been far fewer government support schemes for insulation since 2012. This has led to 4.4 million homes in the Energy Performance Certificate (EPC) bands E to G (the least energy efficient bands) missing out on energy efficient retrofits, which would have reduced their energy needs by 40% to 30%.
Installing insulation costs £1,000 to £10,000, depending on a property’s needs and the type of insulation being installed. This is a price tag that’s out of reach for many households, who would need to rely entirely on government grants to carry out home improvements.
The cost of slow progress on heat pumps
Using a gas boiler instead of a heat pump has cost the average home an extra £245 a year on their energy bills, the ECIU report suggests.
In 2021, the government set a target of reaching 600,000 heat pump installations a year by 2026, but the current number of installations is hovering around 40,000. The ECIU argues that if the government had set the target back in 2016, and pushed for heat pump installations in newly built homes, there would have been 2.1 million additional heat pumps in the UK.
Heat pumps cost £10,000 on average to buy and install, five times what the average gas boiler costs. To help homeowners with their purchase, the government has set up grants for heat pumps, the main one being the Boiler Upgrade Scheme.
However, the ECIU argues that the Boiler Upgrade Scheme only has enough funds to help with 90,000 or so heat pump installations. There are around 28 million households in the UK, only 1% of which already have a heat pump, so the scheme would only fund around 0.00001% of necessary heat pump installations.
The cost of slow progress on EVs
Driving a petrol or diesel car instead of an EV costs the average household £700 a year in fuel bills, according to the ECIU report.
Charging an EV costs almost three times less than filling up a petrol car, according to the ECIU, if you charge your EV. Not everyone can install an EV home charger of course, but charging in public still costs around 16% less than filling up a petrol tank.
However, EVs only make up around 15% of the market share in the UK, compared to the over 60% share petrol and diesel cars enjoy.
The ECIU blames the low EV uptake on a lack of government incentives. This is an opinion that’s recently been echoed by the House of Lords Climate Change Committee, after EV sales from private buyers dipped in January 2024. To date, there’s only been one grant for EVs, which took £1,500 off the £30,000 it typically costs to buy a new EV.
The cost of slow progress on solar panels
Not having solar panels installed on their home has cost the average household £615 a year, according to the ECIU.
Solar panels can cut the average household electricity bill by 70%, by our estimates, if you sell excess electricity your panels generate back to the grid through the Smart Export Guarantee (SEG).
Unfortunately, there’s very little government support for domestic solar panel installations, and given that solar panels cost £7,860, many of the poorest households, who would benefit most from cutting their electricity bills, can’t afford them.
