UK households with certain types of heating warned they could face £2,500 bills

A woman wrapped in a blanket
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UK householders with certain types of heating could find themselves facing energy bills of £2,500 a year as the price cap rises from October. This is significantly higher than the £1,717 cap for dual-fuel homes set by Ofgem for the next three months.

Nearly 250,000 social homes (owned by councils and housing associations) still rely on outdated electric heating and will be most vulnerable as energy prices rise, experts have warned. However, the Government's Warm Homes: Social Housing Fund can help social landlords improve energy efficiency, including upgrading heating to modern standards.

Fuel poverty charity National Energy Action (NEA) and UK ground source heat pump supplier Kensa have joined forces to call for urgent action to protect consumers and help those who are struggling to afford basic heating. Millions of people in the UK are living in fuel poverty - meaning they cannot afford to keep their homes warm at a reasonable cost - with at least 13 per cent of households in England affected. However, this figure jumps to nearly a quarter among households relying on electric heating.

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This problem is down to the inefficiency of direct electric heating, such as night storage or electric panel heating, and the rising cost of electricity, which has jumped to 24.5p per kWh. As energy prices rise this winter, electrically-heated households could see annual heating costs close to £2,500, which many will be unable to afford.

In addition, as household Energy Performance Certificate (EPC) ratings fall, the fuel poverty gap is widening even further. Electrically heated EPC D properties have an average fuel poverty gap of £341, electrically heated EPC E properties have an average fuel poverty gap of £1,028, and electrically heated EPC F and G properties have an average fuel poverty gap of £1,823. These figures represent the additional amount they'd need to keep their home warm.

More efficient heating systems can boost EPC scores and cut energy bills. This includes networked heat pumps, which use individual ground source heat pumps in multiple properties, potentially offering 400 per cent energy efficiency – far exceeding the maximum 100 per cent efficiency of traditional electric heating systems.

Networked heat pump provider Kensa says its Shoebox NX heat pump combined with networked heat pumps could dramatically reduce energy bills for electrically heated homes to just £613 a year, far less than the £2,450 for an electric heating standard rate tariff or the £1,869 for electric heating on an E7 Dual Rate Tariff.

Maya Fitchett, policy analyst at National Energy Action, said: "This winter, the increase in the price cap will mean an estimated six million households are living in fuel poverty across the UK, unable to heat and power their homes. We have known for too long that a disproportionate number of these fuel-poor households rely on inefficient electric heating, making them particularly vulnerable to price increases.

"Ofgem's price cap will mean that customers reliant on electricity for all or most of their energy needs will see additional increases of approximately £70 compared to direct debit customers. This means many of these households cut back their energy use to dangerous levels, some don’t heat their home at all.

"It doesn't have to be this way. When installed alongside appropriate insulation measures, low-carbon technology, such as heat pumps, can help households to significantly reduce energy costs. Often this technology is too expensive for many of the people National Energy Action (NEA) try to support, but the Government’s Warm Homes: Social Housing Fund can be essential in supporting low-income tenants to benefit from this technology. This is also vital to make progress towards statutory fuel poverty and net zero targets."

Stuart Gadsden, commercial director at Kensa, said: "Since 2020 continuous spikes in energy prices have left millions of UK consumers reeling at the sight of high energy bills, with many struggling to afford to even turn on their heating. The fuel poverty gap has been rising, and households with direct electric heating are seeing the gap widen most. Networked heat pumps can provide a much-needed lifeline for these people, shielding households from unstable energy prices and cutting heating bills by over £1,200 a year.

"Social housing landlords have made important commitments on fuel poverty alleviation and the climate. With the Warm Homes: Social Housing Fund, they have a clear pathway to fund these vital projects, improve heating for their tenants and potentially lift them out of fuel poverty altogether."

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