Households with fossil fuel cars and gas boilers are shelling out £1,180 more on their annual bills compared with their electric counterparts, according to new analysis shared exclusively with Sky News.
Amid high inflation, the saving for homes with electric cars, heat pumps and an energy efficiency band C rating – the government target level – has almost doubled from £620 a year ago, research by think tank Energy and Climate Intelligence Unit (ECIU) has found.
The number is set to to jump further still to £1,600 in October.
“The question of upfront costs can be significant,” acknowledged Dr Simon Cran-McGreehin, ECIU’s head of analysis.
That is why, as low-income households particularly struggle with bills amid a cost of living crisis, “government support to help them get over that hurdle is increasingly important”, he argued.
Dr Simon Cran-McGreehin welcomed the “noble and important” multi-billion pound support package from the government that includes a discount on energy bills.
But diverting some of that money into insulation would “get more bang for your buck and… solve things in the longer term,” as those homes would not need further subsidies in future, he said.
The analysis is the latest of many to stress the importance of insulation, but the government says it “[makes] no apology” for its support package, which includes £400 towards energy bills.
Jack Richardson from the Climate Environment Network (CEN) told Sky News the Chancellor Rishi Sunak is “subsidising energy that’s leaking through people’s roofs”.
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Money talks
Improving insulation from a band D to band C can save 20% on energy bills, with measures like cavity wall and loft insulation costing a few hundred pounds each, Dr Simon Cran-McGreehin explained. The difference can be worth up to £500 per year for a household, according to CEN.
Heat pumps start at around £7,000, but could be brought on par with gas boilers with the help of the government’s £5,000 Boiler Upgrade Scheme grant, though the goods and installers are in short supply.
The greatest saving, at £960 a year, comes from electric cars, which cost much more than fossil fuel vehicles, but are cheaper to run, and are now hitting the second-hand market.
Electric car prices could be about to plummet – here’s why
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Inflation bites
The gas and oil crises are to blame for a third of the 9.1% inflation rate – reaching a 40 year high in May – the analysis found.
That means electric households are experiencing much less inflation from energy – almost a third lower than the rate in gas and petrol homes.
“The point of putting it in terms of inflation is showing just how the rapid changes in fossil fuel prices are causing this difference to grow… it’s a constantly changing picture and it’s only really getting worse,” said Dr Cran-McGreehin.
A spokesperson for the business department, which is administering the Treasury’s energy rebate scheme, said it was “necessary to provide immediate financial relief for households in these difficult times”.
The number of homes with an energy efficiency rating of C or above is at 46% and rising, thanks to government support, they said.
In April the Treasury blocked proposals to expand the government’s energy scheme to upgrade household insulation and energy efficiency.
The government’s own climate advisers last week warned of a “shocking gap” in policy for insulating homes.
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