Insulate To Combat Energy Price Hikes

10 October 2013

Home insulation could save householders more than ever before as energy prices are set to rise once again.

Energy giant SSE announced this week that its customers would see their dual fuel bill increase by an average of 8.2% with effect from 15 November. Other energy suppliers are expected to follow the Perth-based company’s lead shortly.

Customers in the southeast of England will be hit hardest, with increases expected to weigh in at 9.7%. Customers in the north of England and Scotland will see a price rise of about 7%.

The news will come as a low blow to customers already facing expensive energy bills, but Government initiatives offering Cavity Wall Insulation, Solid Wall Insulation, and Loft Insulation could at least soften the blow.

With the announcement of the price hike, SSE officials and Government representatives partook in another round of the blame game.

“We’re sorry we have to do this,” said Will Morris, Group Managing Director for Retail at SSE.

“We’ve done as much as we could to keep prices down, but the reality is that buying wholesale energy in global markets, delivering it to customers’ homes, and Government-imposed levies collected through bills – endorsed by all the major parties – all cost more than they did last year.

“Eighty five per cent of a typical energy bill is made up of costs outside our direct control and these costs have increased. So far this year we have made a loss from supplying energy as a result of the higher costs we have been facing and continue to face.”

Meanwhile, Edward Davey, Energy and Climate Change Secretary, retorted: “Half of an average energy bill is made up of the wholesale cost of energy. This far outweighs the proportion of a bill that goes to help vulnerable households with their bills and to cut energy waste, and to encourage investment in the new low-carbon energy generation we need to keep the lights on. SSE’s own figures show that wholesale price rises have contributed more than policy costs to this price increase, as a share of the bill.

“We’ve already taken action to help consumers this winter. Two million households will get as much as £135 off their bills under the Warm Home Discount. 230,000 homes will be warmer this year by getting energy efficiency measures installed under the Energy Company Obligation. We’re also changing energy bills by cutting the number of tariffs, making bills simpler and clearer, and getting people off poor-value dead tariffs and on to the best deal for them.”

The Energy Company Obligation, one of the Government-imposed levies SSE cites, provides a means tested non-repayable grant to those that qualify. Under the scheme, this grant can be used to install Cavity Wall Insulation, Loft Insulation, Solid Wall Insulation, and a number of other measures. All three home insulation measures offer savings that could potentially negate SSE’s price hike.

According to the energy firm, following the price increase the average annual dual fuel bill will be £1,380, an increase of £106.

According to the Department of Energy and Climate Change, installing Cavity Wall Insulation saves an annual sum of up to £135, while Loft Insulation can save up to £180. Solid Wall Insulation, for those properties built before the 1930s can initiate up to £490 of savings. SSE customers installing these measures can therefore counter this upcoming price hike.

Customers not eligible for a grant under the Energy Company Obligation can seek financing from the Green Deal, a similar scheme that provides a fixed-rate repayable loan.

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