The average household energy bill could nudge £5,000 a year by 2020 if current price trends continue, nearly four times the present level, research from online switching service uSwitch.com warns.
Uswitch points out that the average energy bill for a typical household has more than doubled since 2005 to £1,243 from £580. Extrapolating that into the future and after adding in the energy infrastructure spending that the country badly needs, that average rises to £4,733 over the next 11 years.
According to consultants Ernst & Young, investment in Britain’s energy supplies will cost £233.5bn, of which half will go on renewable energy generation and the rest on new conventional power stations, “smart” meters and grid upgrades.
The investment will add £548 a year onto household energy bills for the next 15 years. The rest of the increase is down to rising commodity prices.
Ann Robinson, director of consumer policy at uSwitch.com, says: “This is a wake-up call for us all. The £5,000 a year energy bill may seem like an outside possibility, but we have to remember that energy bills doubled in the past five years. The fact is we are entering a new era of high cost energy and households will have to adapt their behaviour accordingly.”
Domestic fuel bills shot up last year when the price of crude oil hit a record of close to $150 a barrel. Although oil prices subsequently tumbled to below $40 a barrel, they have risen again sharply in the past couple of months, to about $70, threatening to start pushing up the prices of gas and electricity again.
Robinson says that while the government has been banging the drum for energy efficiency for a while now, consumers have been reluctant to spend money on these measures.
“As a result, energy efficiency has been massively under-performing even though it is one of the biggest defences we have against escalating energy costs.
“My advice to consumers is to invest in making your home more energy efficient, reduce the amount of energy you use and make sure you are paying the lowest possible price for it.”
In many parts of the country, things like cavity wall and loft insulation are heavily subsidised by utility companies or local authorities and some progress has been made on insulating homes.
From 2016 all new built houses have to be “zero carbon” which means they will hardly consume any energy. But the vast bulk of Britain’s housing stock is old and inefficient in terms of energy use. uSwitch.com says that while big projects such as a new energy efficient boiler or home insulation can be expensive, the savings people make through cutting the price of energy could be re-invested into energy efficiency measures so that homeowners can reap even greater rewards in the future.
I don’t agree. While prices are rising the cost of utilizing energy effecient products and alternitave energy sources that are now available for the average customer how could anybody pay anything close to that. I am in the industry and there are many great products, and yes insulation is one of them but there is a point there also where the return on invewstment is not there as well. What I have seen as the largest problem with the industry is the sales approach and the salesman. There are people out there selling things way past there effective use. How much insulation can you use in your current climate before you are wasting money? The problem is that there is no one size fits all solution so you need to meet with a processional and address the issues that each building has and treat the major deficiencies first. I live in Palm Springs Ca. solar is an excellent solution, however if I lived in Seattle although it is still a good solution the return on investment would be 30 to 50% longer. Solar attic fans are great here for those who have attics with AC equipment. the temp is regularly over 170 F and way over that. Then I read about a person saying that they are a scam??? I thought what? well they live in the mountains above Denver Colorado and their house is mostly shaded from noon on. whoever sold them that item should be ashamed of themselves and whipped. There are plenty of other issues that could have been addressed for the same money. Insulation would have been a great place to start, maybe windows, or power factor correction device. I can save almost anybody 50% on their utility bills with a cost that is resonable. within 5 years at least. and I can save 20 to 30% with a payback of less than 3 years. These are very easy numbers to achieve here in my local climate, during the summer I have saved customers 30% on their summer electric bill and the cost was less than 4 months savings! They were saving almost 300 a month. and their bill was only 915.00! There are many, many cost effective energy solutions out there find your local consultant. DONT rely on the salesman that comes to your door. If you do ask him not for some figures like I just gave but ask what you can expect to save. There are always exceptional cases like the one I just gave it is a true case but I could never claim to save the next guy the same amount based on a similar job. Find an industry professional who represents more than just one or two products. Then make sure that if they say that they are going to do a survey or make a report ask for a copy of it. EVERY reputable consulting company leaves a copy of their findings.
By: justin carlson on August 20, 2009
at 9:21 pm
Justin, I think the main difference is the climate here in the UK. Due to America’s size the climate varies from state to state as I understand it, but in the UK whilst solar and alternative energy sources are becoming more popular, the ROI I would imagine is longer. Whilst I think the figures above are probably sensationalised, I can also believe they may not be far off the mark. I house share with a friend in a small, relatively modern home and our energy bill is not far off £1,000 a year now – maybe energy prices in California are comparatively lower?
I work for a company that sells insulation of various kinds, I also happen to know several people who sit on the committee that writes the British Standards. An awful lot of homes in the UK are still very poorly insulated and this needs to change. Newly built homes are beginning to address this problem, but there are still a significant number of homes in the UK where there is less than 100mm of insulation.
The other fact is solar systems cost thousands of pounds in the UK, insulating your home can be done for a lot less. We live in a fairly low temperature climate, keeping heat in is a fairly natural place to start the energy efficiency efforts.
By: Insulag on September 22, 2009
at 10:35 am