Energy Bills to Fall with £75million Energy Efficiency Scheme

Energy regulator Ofgem’s most recent price cap update claims energy prices could fall by up to 12% from April 1, 2024. Despite this, many consumers are still facing extremely high energy bills and are seeking ways to reduce costs and maximise efficiency.

Several schemes have been launched to assist, including the UK government’s latest announcement of a £75 million pledge towards energy efficiency upgrades, which could help save hundreds on energy bills over time.

What is the Social Housing Decarbonisation Fund (SHDF)?

The Social Housing Decarbonisation Fund (SHDF) aims to bring down energy bills and reduce fuel poverty by funding energy efficiency upgrades, including heat pumps, insulation, and double glazing.

Under the latest announcement, 42 councils and housing associations in England will be provided with funds to mitigate the expense of heat pump installations. The scheme will also help around 8,000 families to save around £400 on their energy bills over time and generate more than 1,300 jobs across the UK, according to a government spokesperson.

Energy Secretary Claire Coutinho said:

“Our Social Housing Decarbonisation Fund is helping families to keep their homes warm and their bills down. We want to support hard-working families to make changes, rather than burdening them with unnecessary costs.

“This funding today will help up to a further 8,800 households save around £400 a year on their energy bills.”

Who is Eligible?

The funds are open to applicants who have not received any support through the SHDF previously.

Additional Funding:

This initiative is the latest investment in a wider package to provide energy efficiency and decrease reliance on fossil fuels across the UK.

Any councils and housing associations that receive a share of the funding are required to co-fund the projects. Total funding for this wave comes to more than £200 million, which includes £139 million of co-funding and £75.5 million of Government funding.

However, more than £1 billion has been spent through SHDF on upgrading residences in the UK over the last five years, and around £20 billion has been allocated to net zero schemes so far, including schemes such as the Boiler Upgrade Scheme.

What Other Support is Available for Energy Bills?

The support available for residential users and business consumers varies. For domestic users, the following schemes are available:

• The £500 million Household Support Fund was due to end in March 2024; however, it has been extended an additional six months, as confirmed by Chancellor Jeremy Hunt in the Spring Budget.
• The Warm Home Discount scheme continues to offer energy bill discounts to those who are eligible.
• The UK government's Fuel Direct Scheme is available to people who are struggling to repay energy debt.

Additionally, energy suppliers should offer all customers affordable payment plans and repayment holidays if they are struggling with their energy bills.

Whereas for businesses. the energy support scheme, which offers firms a discount on wholesale prices, is set to end this month. The scheme offered a larger discount to heavy energy-using sectors, like glass, ceramics, and steelmakers.

What is the Energy Price Cap?

Ofgem is responsible for setting and regulating the maximum price suppliers can charge for each unit of gas and electricity they use. It is assessed and set every three months and covers 29 million households in the UK.

From April 1, gas prices will be capped at 6p per kilowatt-hour (kWh), falling from 7.42p per kWh, and electricity at 24p per kWh, falling from 28.62p per kWh.

Ofgem claims that the average consumer paying for dual fuel will save around £240 compared to the previous price cap.