Clean home upgrades could cut energy bills by £800, says report
UK – Research by the Energy Saving Trust says that some households could reduce annual energy bills by around £800* by combining clean technologies such as heat pumps, solar panels and battery storage with the right smart tariff**.
It adds that these potential savings mean it is now possible for a heat pump to pay for itself within four years, after government grants and not needing to replace an old boiler are deducted from an “average” installation cost of £11,700.
With the energy price cap set to rise in October, the trust says that households need urgent help to access clean technologies, smart tariffs, advice and financial support that could cut their bills.
Analysis from its new report, Flexible Futures: Integrating smart tariffs with low carbon home technologies, modelled more than a million scenarios to test how heat pumps, solar panels and battery storage affect household energy costs in combination with different tariff types.
The report finds that heat pump users on smart tariffs can save around £330 a year compared to those who are not, yet half of heat pump owners are not currently on one. The report also shows how much more households can save by combining technologies, with heating costs falling by up to 80% compared to using gas alone.
For the 3.9 million households expected to need a boiler replacement by 2027, the decision is not whether to spend the money, but what to replace it with. Once available government grants and the cost of a new gas boiler are taken into account, switching to a heat pump could cost as little as around £500 more than replacing a gas boiler. When paired with a suitable time-of-use tariff, this can offer lower running costs over time compared with a gas boiler. Running costs can fall even further for households that already have solar panels and battery storage.
The findings come at a crucial time, as households face uncertainty over future energy costs and continue to find clean technologies and smart tariffs difficult to navigate.
This research shows that using clean technologies together, and choosing the right tariff, can help bring costs down.
Stew Horne, Energy Saving Trust
The Energy Saving Trust is calling on the UK Government and Ofgem to introduce policy changes that ensure households have access to more comprehensive, impartial advice, improved tariff comparison tools and greater awareness that smart tariffs can make heat pumps cheaper to run than gas boilers, alongside the wider benefits of clean technologies. It also urges faster progress on flexible tariffs and financial support through the Warm Homes Plan.
Stew Horne, Group Head of Sector Intelligence and External Affairs, said: “We know that many households are worried about their energy bills, and it can be hard to know what will actually make a difference.
“People need clearer advice, better tools to compare tariffs, and more support to access these technologies so they can make confident, informed decisions on what is right for their home.”
* Based on modelling of over 1 million scenarios across different home types and energy use behaviours.
**Based on analysis of multiple tariff types using 2024 energy price data.
