Even before the war in Ukraine, energy prices in the UK had been creeping up for the last five years1, heaping ever more pressure on households.
In 2022, we’re facing a global energy crisis, with the wholesale cost of natural gas and electricity skyrocketing as countries around the world compete for limited supplies.
As a result, the cap on UK energy prices, designed to protect consumers from unfair price hikes, is going up by 50% in April.
National Energy Action, the national fuel poverty charity, estimates that the number of UK households living in fuel poverty will more than double in the year from October 2021 to October 2022, from four million to 8.5 million2.
That’s one in three family homes spending more than 10% of their full household income to stay warm.
That will hit households hard; already people are literally having choose between heating and eating.
Winter is coming
But this is only the start; we can confidently predict that the energy price cap will see a similar increase again in October, just before winter starts to bite .
And these price hikes could become far more regular; previously energy regulator Ofgem was only able to update the price cap every six months, but it’s now been given the power to do it whenever there are ‘exceptional circumstances’3.
At the moment, there are no signs of prices coming down any time soon.
Part of the solution is around education; simple behavioural changes can make a big difference and organisations like the Centre for Sustainable Energy have some great advice for households about reducing the amount of energy they use.
But people need a solution for the long term, not just a quick fix.
Fit for the future
We’re already working with organisations across the country to futureproof thousands of homes, ensuring they are properly insulated and installing heat pumps powered by renewable electricity.
It’s a much more efficient way to keep homes warm and comfy, using less energy and cutting household bills.
Off-gas homes heated by inefficient electric storage heaters are particularly vulnerable to price increases and will be disproportionately affected by the energy crisis.
They also have the most to gain from switching to a heat pump.
The savings generated will vary, but households could typically expect bills to come down by 20% to 30%.
And having a heat pump means households can use ‘time of use’ or ‘off-peak’ electricity tariffs, where energy is cheaper at times when demand is lower.
As an example in action, this could mean a hot water storage tank is filled overnight when energy is cheapest and stored until everyone wakes up.
Schemes create savings
With Daikin on your team, we can survey your housing stock, looking at things like property size, construction methods and current heating systems, to more accurately calculate the savings installing heat pumps will generate for households.
There also hundreds of millions of pounds available in government funding support to install energy efficient heating, through schemes including the Boiler Upgrade Scheme, the Local Authority Delivery scheme and Home Upgrade Grants.
We can also help source funding for things like insulation, which make energy saving measures even more effective.
So, please do get in touch and see how we can help you make fuel poverty a thing of the past.
After all, no one should be having to choose whether to heat or eat.
Nick Huston, Future Energy Business Manager, Daikin UK