Energy Price Increases

Obviously a worry for us all, energy prices have increased at a faster pace than ever before due to ongoing supply chain shortages and increased demand. Other factors, such as the Coronavirus pandemic and the recent conflict between Russia and Ukraine, has pushed prices further north. The current energy price cap that was put in place by the Government is set to expire towards the end of 2022 and it could see a further jump towards £3000.

How Much Have Prices Increased?

The letters from energy suppliers have started landing on the door steps about just how much energy costs are going to rise in the UK. With the cost of living at an all time high, any further rises are of course a huge worry for us all. But there are things you can do to regain control and combat the price rises. Let’s remember, energy prices rarely fall and then get passed onto the consumer so these prices could be here to stay. The average family home will see prices rise close to £2000 over the next 12 months. That’s almost double the price of the last 12 months.

What Should I Do?

Firstly, we recommend sitting down and spending 10 minutes writing a quick list of any energy efficient measures already present in your home. Have a think about whether the loft is insulated or how old your heating system may be. When you make a list of all the things that generate and conserve the energy within your home, it’s possible to quickly identify opportunities for improvements. You can also take our ENERGY AUDIT where we collate a host of information about your home so that we can provide a report of all the things you can do to conserve energy and save money.

It’s almost certain that your home can improve on its energy conservation or at least generate cheaper energy from renewable sources. These measures range from a few hundred pounds up to thousands of pounds depending on what type of product/system you choose. With such a range of products and solutions now available, we’re sure that you must be overwhelmed with all the choices and whether or not the products are actually a solution to helping you take back control of your energy.

Perhaps you’re hoping this will all sort itself out soon? It’s unlikely and it’s only because of an energy price cap implemented by HM Government that prices are not higher. When this price cap expires in the latter part of 2022, it’s entirely possible that energy prices will continue to rise beyond where they are currently.

Beware Of The High Pressure Sales

When costs increase so drastically so does the increase in unsolicited calls, promising free home visits to help you save on energy costs. Generally, this means a sales rep visiting your home, presenting their products and usually trying to get you to sign on the dotted line that day. We urge you not to fall victim of those “buy it now discounts” or “managers specials” because it will likely mean you were being charged way over the odds in the first place.

It’s also important to weigh up all of the options available to you before committing to any one product. A trustworthy energy improvement company should be able to show clear savings to enable you the ability to weigh up the cost-benefit and return on investment. Now is not the time for you to be lining other people’s pockets by paying their over inflated prices. You should take a cautious, careful and considered approach when investing in any home improvement.

Can I Afford To Invest In Energy Efficiency?

The answer is probably a Yes! The average 3-4 bedroom detached home will see combined gas and electric costs rise by £60-£80 per month. That’s up to £5000 over the next 5 years which means that if you can halve your energy costs, you can fully fund the improvements from energy savings. Of course, it’s not as simple as that because it’s not that easy to simply halve energy costs without spending a sizeable amount of money in the first place.

Now it’s important to consider where the energy market might be headed next….. will prices continue to rise? The answer is probably a yes and with historical trends considered, they will continue to rise by at least 5% per annum in all likelihood. Compare these sharp price hikes with the interest you get on any savings in your bank account, could it be the time to think about whether those savings could be better deployed elsewhere?

For every £1000 of savings in your bank account, you’ll be lucky to earn 2% interest per annum but let’s be generous and say that you do. This would equate to £20 of interest per annum or £1.66 per month.

With the energy price increases, many people will be paying in the realms of £150 power month or more. Let’s assume that for every £1000 you spend on energy efficient measures, you reduce your energy costs by 5% (hypothetically). This would turn £150 per month into £142 per month or an £8 reduction. That’s £96 per annum or 5 times the amount of money saved compared to the interest earned – quite a difference.

Of course, the more you spend on saving energy, the more the savings could grow. If we take a £5000 savings balance earning 2% per annum, that’s £100 in interest. Now spend £5000 on energy efficient measures at an average of 5% savings per £1000 deployed, you’re now saving £450 on your energy costs per annum vs the £100 earned by keeping your money in the bank.

The important element here is to remember the importance of choosing the right products to reduce your energy consumption – that’s where we come in. Our focus isn’t just how much you can save over 5 years, it’s also about choosing products with a significant lifespan, one’s that may last 5 years or more. Assume you have no insulation in your home and you spend £5000 on loft and cavity wall insulation saving a combined 50% on the heating element of your energy bills over a 10 year period. Heating accounts for around 30% of all energy costs, so approximately £540 per annum. A 50% saving will be £270 which, when applied over a 10 year period is £2700. If current interest rates remain low, that same £5000 would be worth £1100 in gains, a whopping £1600 less than investing in energy conservation.

Saving for a rainy day is of course important and we aren’t suggesting you blow your entire savings on saving energy costs, however, with the above considered, perhaps you can’t afford not to invest now!

What Should I Buy?

This will depend on what measures you have already had installed – we don’t believe in wasting money and tying up your capital unless it’s going to generate tangible savings. For example, if you have cavity wall insulation already, unless it’s failed within the wall, you can’t top it up. Depending on the cavity depth, you could choose to have external or internal wall insulation to beef up the thermal protection. If your loft insulation is looking tired and depleted, it could be worth looking into a top up or indeed an entirely different product.

You may have heard the phrase “airtight insulation” – this is particularly important for new build properties and is generally best achieved when using spray-applied Polyurethane otherwise known as spray foam insulation. Spray foam insulation is also a popular choice as a retro-fit alternative to the traditional fibre-based insulation. Our sister company, ThermoFoam, specialise in spray foam insulation but you should be aware that some mortgage lenders currently hold concerns when spray foam is present. We are working hard to overcome this stigma and if you’re not planning to sell your home anytime soon, spray foam would be a great way to conserve energy and is probably the insulation product that will yield the biggest energy savings.

If you’ve already got a well insulated property that meets the recommend current targets, you can put a big green tick next to energy conservation. This means that energy generation could be the most appropriate route for you. Solar panels, hot water heating systems and energy efficient boilers could represent a great investment but be warned of the high pressure sales companies who inflate the price to see how much they can get out of you. Also consider your windows and doors. If you have single glazed windows, it’s definitely time to upgrade.

There are also many other items that can help to boost energy efficiency and save costs. Low energy LED light bulbs are a must whilst energy storage batteries can be a good accompaniment to solar panels, allowing you to store energy from the sun during the day for use in the evening.

When you choose ThermoProtect as your energy management partner, we’ll ensure you are presented with the right assortment of products to make the biggest impact on your energy costs.

Conclusion

It would be easy to feel somewhat depressed right now about the rising costs but it’s never too late to get control of your energy outlay. Making clever changes to the efficiency of your home and reducing your dependence on energy from the grid can help to put the power back in your control, not just while costs are high but for the future as well.

Nothing comes for free and you will absolutely need to use your own finances or borrow money if you want to make the biggest impact on your costs. Other benefits of reducing energy costs will likely mean a reduction of carbon, helping to meet the UK target of net zero by 2050.

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