The UK Government has announced its Warm Homes Plan, designed to tackle fuel poverty and help the nation cut its fuel bills. There are some good things in there, but with electricity prices still high and some limitations based on the housing stock, I don’t think that it goes far enough.
Although designated the Warm Homes Plan, the £15bn, a lot of what’s being made available is about cutting energy costs, and moving people to carbon-neutral heating, via heat pumps.
Cheaper solar panels are a win
One element that I heartily agree with is the incentives to get solar panels installed. Relatively cheap, straightforward to do, and capable of generating free electricity, solar panels are brilliant.
Under the new scheme, low-income families could receive fully-funded solar and battery installations, and those in social housing could see entire streets upgraded. For everyone else, government-backed low- or zero-interest loans for solar panels, batteries and heat pumps will be available reducing the cost of installation.
This is a good thing. Properly installed, solar panels have a real impact on energy bills and can cut costs, and even earn you money via a feed-in tariff (currently, you can get up to 15p per kWh of energy that you export back to the grid).
As good as solar is, there are some limitations on the technology, notwithstanding that the point where you need the most power (Winter) is when you generate the least amount of electricity.
From my experience, on a cold sunny day, my solar array can output near 2kW; on a cloudy, overcast day, that drops to around 150W. I have a south-facing roof, which is ideal, but if your house can only have solar panels installed on a north-facing roof, or is orientated east/west, you’ll generate less power.
Of course, the thing that makes the most difference is how many solar panels you can have installed. On a small Victorian terrace (which I live in, and of which there are around 6 million in the UK), you’re quite limited on the number of panels that you can have installed; if you’ve got a large home with a big roof, you can have a much bigger array and generate a lot more power. If you live in a flat, even if you’re on the top floor, good luck getting solar, is all I can say.
Batteries are good, but have their issues
The scheme also funds batteries, which store power and output it later on. Ideally, you charge the battery via solar, and use the power when it’s dark, but with a time-of-use tariff, you can top up a battery on cheap power.
Sounds great, but there are some limitations, and how much solar power you generate, how much the battery costs, and how cheap your off-peak power is, all have a part to play.
Not to mention that you have to find somewhere to put the battery in the first place. Most can go outside, but that assumes that you’ve got a big enough garden, and don’t mind the battery being on display. Again, if you’re in a flat, good luck.
Electricity prices remain an issue
Ending the Energy Company Obligation (ECO) scheme from this April, households will see utility bills drop. According to Money Saving Expert, this should mean that electricity prices fall by 3.54p per kWh, and gas will drop by 0.31p per kWh.
With the current price cap (27.69p per kWh for electricity, and 5.93p per kWh for gas), prices should drop to around 24.15p per kWh for electricity and 5.62p per kWh for gas. The new price cap, due April 1 2026, may see some further reductions.
But, we’re still looking at a situation where gas is over four times cheaper than electricity.
If you buy a heat pump, you’ll find that it’s a lot more efficient than a gas boiler. For a typical air-source heat pump (the most popular type), it’s around 280% efficient, which means that for every 1kWh of electricity consumed, 2.8kWh of heat is generated.
A gas boiler might be around 90% efficient, so for each 1kWh of gas consumed, you get 0.9kWh of heat.
Heat pumps are better, but the high cost of electricity means that gas boilers are often cheaper to run overall. And, gas boilers are easier to fit into homes: heat pumps are quite large, so they need enough space to go outside, and they’re trickier to install in flats, too.
Solar panels and batteries can help reduce costs, if all the calculations are done properly, as can time-of-use tariffs, but all of that involves some complication. As pointed out before, electricity costs need to be lower to really drive the adoption of low-carbon technologies.
Insulation and smart technologies are important
The insulation scheme has been downgraded, which some quarters agree with, saying government money is better spent on incentivising green technology. There’s some truth in that, but the UK has very old housing stock, with a lot of homes that have solid walls, single glazing and plenty of air vents to reduce moisture build-up. The issue with these homes is that, even after simple insulation (loft and underfloor), there are still many draughts, so they cool rapidly.
To warm a house and keep it at the desired temperature, you need to add more heat than you lose. Properly insulated homes need less energy to warm them, and less energy to keep them warm; draughty, poorly insulated homes need a lot more energy to heat them, and they cool rapidly. Insulating solid walls isn’t straightforward: you can do it externally, which alters the look of your home, or internally, which affects room size. And, these types of insulation can be expensive. According to Checkatrade, external insulation starts at £6000 but can cost up to £30,000.
But, insulation reduces energy use, which is good for the pocket and good for the environment, regardless of whether you’re using a heat pump or a gas boiler. Ultimately, with such an old housing stock, making it cheap enough to revamp that to help cut carbon emissions seems to make a lot of sense.
As do smart controls. With a smart heating system, such as Wiser or Tado X, you can control the temperature of each room individually, so you only have to heat the ones that you’re using, which can cut costs dramatically. These kinds of upgrades aren’t funded, even though they can have an immediate impact from day one, regardless of the heating source.
We need to move away from fossil fuels; there are good technologies to help, but cutting electricity costs at the source and helping those with old homes improve insulation need to be priorities.
