How to make big savings on winter bills
Whether its insulation, solar panels or new heat pump, it’s best to plan ahead.
With high energy prices, many people are worried about paying their bills this winter, which makes reducing the amount we consume at home more important than ever. And with global warming a man-made catastrophe, being more energy efficient can help you cut carbon emissions while saving precious pounds.
Now is a good time to start making your home more energy efficient and ready for the colder weather.
Insulation
If your home was built before 1930, it’s likely to have two walls with a hollow centre (cavity walls) rather than a single brick layer. If this is the case, you may be losing a lot of heat from your home. Most houses built after 1995 have wall insulation to keep heat in, but if your home is older, it may not have insulation and heat can quickly escape.
Cavity wall insulation is when the gap between your internal and external wall is filled by drilling a series of holes and then pumping in either mineral wool or a polystyrene bead. The work only takes about half a day to complete. Always use an approved cavity wall installer because if the work isn’t done properly, it can lead to mould or trapped moisture and will need to be stripped out.
The average cost of cavity wall insulation is £2,140 for a detached house, £1,530 for a bungalow, £1,570 for a semi-detached, £1,000 for mid-terrace and £1,030 for a purpose-built high rise flat, according to the latest government estimates. Fortunately, there are grants available to help those on low-incomes and those living in the least energy efficient homes.
The long-awaited Great British Insulation Scheme (GBIS) is set to go live later this year. Aims include making an estimated 300,000 homes more energy efficient, primarily through installing free or low-cost cavity wall insulation. In addition to low-income and vulnerable households (those on certain benefits), the scheme will broaden to include a ‘general group’ in homes with an EPC (Energy Performance Certificate) rating of D-G and within council tax bands A-D in England and A-E in Scotland and Wales. In the private rented sector with a few exceptions, only those properties in EPC bands D and E will be eligible.
The government estimates those receiving insulation upgrades will see bills reduced by around £300-400 per year. The scheme will run from 2023 to 2026 with an anticipated spend of £1bn. Low-income households will get free upgrades, but others will be expected to contribute. The exact sum will be decided by your energy supplier on an individual household basis.
The GBIS is being delivered by energy suppliers overseen by Ofgem, the regulator for Great Britain. It’s not yet clear what cash help there will be for those living in hard-to-insulate homes with solid walls, which are among the worst performing. The GBIS will largely replace a previous scheme called ECO+
When the GBIS launches, households will be able to check if they’re eligible on Gov.uk or through a participating energy provider or local authority. If you qualify, you will then be contacted about arranging a survey of your home and to organise any work. Not only could you benefit from insulation, but your home will also be assessed for ventilation to help improve the air flow and air quality. Those in the general group will only be able to receive one energy saving improvement, while low-income group households may also receive heating controls and loft insulation.
Meanwhile covering your hot water cylinder in a jacket is a quick and cheap job that will save you money.
Boiler or heat pump?
An air source heat pump extracts heat from the air outside to supply a home’s heating and hot water. Heat pumps use four times less energy than even the most efficient boiler, according to Octopus Energy. Plus, they run on electricity which is getting greener each year.
Despite their green credentials, heat pump installations in the UK are lagging behind the rest of Europe. Heat pumps cost on average £8,000 but could set you back a hefty £15,000-plus for a larger home. In a bid to boost take-up, the government is offering grants of £5,000 towards the cost of an air source heat pump in England and Wales under its boiler upgrade scheme. Homeowners in Scotland can usually receive a grant of £7,500.
British Gas and Octopus Energy are currently offering heat pumps starting from £3,000, including the government grant. Heat pumps can result in significant savings, especially for homes off the gas-grid that upgrade from oil-fired boilers. However, if you have a relatively new gas boiler, you will see little or not savings by switching to a heat pump though you will still be doing your bit for the planet by no longer burning a fossil fuel.
Remember for a heat pump to work efficiently your home must be well insulated or you could see bills rise. You may also need to install a couple of larger radiators, adding to the overall bill.
Solar Panels
If you’re not quite ready to switch to a heat pump, another option is a solar panel system and ideally a home battery to store the green energy produced. Generating your own energy reduces your reliance on the National Grid. According to Octopus Energy, you could spend 80% less on electricity bills. This means the average £1,200 a year electricity bill could be reduced to £240. Plus, you can sell spare green energy back to the grid, though export rates vary. Octopus Energy is currently offering 15p per kWh for every unit you export, one of the better rates (prices correct August 2023).
It’s possible to further reduce your bills by using appliances, such washing machine and dishwasher, during the day when the sun is shining, and your solar panels are active.
A standard 4kW solar power system will cost about £6,400 to install, according to Green Match. The final price will depend on size, the type of panels, ease of installation, location and any additional components such as a solar battery storage system. The higher your energy use, the more beneficial solar panels and a battery will be at cutting your bills. If you have a low energy usage, however, the payback period will be longer.
Green mortgages and loans
High Street banks and building societies are starting to offer so-called “green mortgages.” That is lower interest rates to customers who buy energy efficient homes. There are also retrofit mortgages offering additional borrowing at lower rates and grants to help install a heat pump or solar panels. It may be worth contacting your mortgage provider if you are considering greening your home even if you don’t need to borrow more cash.