The last few months have seen some positive news for energy customers. The Energy Price Cap has come down, helping wider inflation to fall back to the Bank of England’s targets. In addition to that, the new government has promised a revolution in energy.
Having taken office following its landslide victory, the Labour government wasted no time in starting the ball rolling on its energy plans, lifting the planning statement embargo on onshore wind farms in England and including plans for its ‘Great British Energy’ investment firm in the King’s Speech.
Alongside this have been all sorts of promises for developing and expanding renewables and the national grid, with the ultimate benefit not only of giving Britain back its energy independence, but also of producing lower bills.
The Next Price Rise Looms
It all sounds so great, but householders in London would be wise not to take their eye off the ball right in front of them, rather than the one to be played with in tomorrow’s game. While there are big promises made, the fact is that whether they are ultimately fulfilled or not, there are still big concerns to focus on in the here and now.
In particular, after some good news on the Energy Price Cap front in recent months, asset Manager Columbia Threadneedle has warned that prices are about to shoot up again.
As the Sunday Telegraph reported, the analysts predict the cap will rise by £194 in October, taking the cap from £1,568 to £1,762. This verdict is not conjured up out of thin air or based on past events, but on future contracts influenced by the ongoing war in Ukraine. Cornwall Insight also predicted an increase recently, forecasting an October cap of £1,723.
These warnings act as a reminder that in the here and now, promises about how much cheaper energy will be in the future are of little relevance. The question is, what can be done about it?
How To Keep Bills Down
A step anyone can take is to have a new gas boiler installed. If your existing one has been around a few years and is no longer as efficient as it used to be, you could be burning up more energy than you need to get the same results, which is only going to add to your bills.
The Federation of Master Builders produced a very useful guide to how much a new boiler could save two years ago, when the energy shock was at its height.
This noticed that boilers, like homes, are rated according to efficiency. An A-rated boiler would run at 90 per cent efficiency, whereas a G-rated one would be 70 per cent efficient. The difference then was worth £580 a year, according to British Gas – a figure one could add a few more pounds onto with inflation now.
Indeed, as the article pointed out, your boiler uses up 50 per cent of the energy in your home, so the level of efficiency is going to have a huge impact on your final bill.
Moreover, the reality with a boiler is that as it gets older, like so many other things, it will not run as well as it used to. That means even if your boiler was an A-rated one when you got it some years ago, it may be far from that now.
What Sort Of Boiler Do You Need?
The guide also considered the issue of what sort of boiler you should get. Four factors listed were your household size, whether hot water is needed instantly, the amount of space available and the existing system in use.
Of these, the size of your family is the most subject to change, since you may have started out without children and now have two, three, or more, increasing your need. Alternatively, they may have grown up and fled the nest, meaning your need is smaller. This can shape whether you need a bigger boiler or a smaller one.
A further consideration listed was that a new boiler can boost your home’s value by as much as £9,000. Once again, the figure may be a little higher now, although depressed house prices mean it won’t have grown by much in London recently.
Even so, that could be a significant boost if you do want to sell, as the property market recovery may be limited until inflation is sustainably low enough to prompt a few interest rate cuts, something a fresh hike in energy bills won’t help with.
Ultimately, the message is clear: For all the long-term plans concerning energy policy, the here and now presents a clear prospect of another significant energy bill increase. But by getting a new and more efficient boiler, you can counterbalance not just this, but be prepared for any other big jumps in cost over the next few years.