Green levies add £153 on to energy bills

For households with gas boilers, there could be even more pain. In October the Government said when the current gas spike subsides, it would “look at options” to shift or rebalance energy levies away from electricity to gas within the next eight years. Critics have warned this could add hundreds of pounds onto already large bills.

The move could mean customers with traditional gas boilers will pay more tax than those with more expensive heat pumps, or hydrogen boilers. The proposals have already sparked controversy at a time when household energy bills are rising rapidly. But how much more will you pay, and what steps can you take now to cut your bill?

Should you change your boiler now?

A ban on the sale of new gas boilers has been mooted for 2025. However, after concerns were raised about the upfront cost to households, the Government is now considering a delay. Another proposal would see all gas boilers outlawed by 2035.

In May 2021, the Department for Business, Energy and Industrial Strategy said it would “incentivize” people to switch to low-carbon alternatives, while making sure boilers are replaced in a way that is “fair, affordable and practical”.

To help reach carbon emission targets, 600,000 heat pumps are to be installed each year by 2028. Hydrogen boilers have also been mooted as an alternative, but these devices are still in development.

Air source heat pumps pull ambient heat from the air and increase the temperature using a compressor. This is then used to heat radiators and water. Ground source heat pumps are similar, but draw heat from pipes buried in the ground. These have higher up-front costs but run more efficiently.

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For many households, these devices are prohibitively expensive. While a replacement gas boiler can cost around £1,000, an air source heat pump full system installation can cost between £7,000 and £14,000, with ground source heat pumps costing between £15,000 and £35,000.

Adding the current green tax burden on to gas instead of electricity could see bills rise for those who can least afford to make the switch.

Will the Government help you go green?

The Domestic Renewable Heat Incentive, a Government grant, can help to reduce the overall outlay of a low-carbon heating device. People who join the scheme and adhere to its rules receive quarterly payments for seven years for the amount of renewable heat that their system produces, to help offset the cost. This scheme will run until March 2022.

The Government is launching the Boiler Upgrade Scheme from April, which will replace the Renewable Heat Incentive and last for two years. It will offer grants of up to £6,000 to help install devices such as heat pumps.

What should I do to cut my bill?

Changes to your home to improve its heat retention could help mitigate rising gas costs or improve the efficiency of a heat pump.

According to My Utility Genius, a comparison site, around 35pc of heat in an average semi-detached house is lost through its walls. Properly installed cavity wall insulation can save up to 15pc on heating costs.

Homes built before the 1920s are more likely to have solid walls. These are more difficult and expensive to insulate but doing so can generate higher savings. My Utility Genius said that installing this type of insulation could cut the average energy bill by up to £350 a year.

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In an uninsulated home, almost a quarter of heat is lost through the roof. Loft or roof insulation could save up to £175 on the average bill, the comparison site said. Insulating floors, by filling in gaps below skirting boards can reduce heat loss by up to 10pc, cutting £60 from the typical energy bill.

This article is kept updated with the latest information.

Will the Government announcement help you, or should more have been done to assist struggling households? Contact [email protected] with your story

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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