Social housing tenants could face huge spike in energy bills

25th May 2023

Hundreds of thousands of households connected to heat networks – which is particularly common in social housing – could soon see their energy bills more than double, research suggests.

In a new report, analysis by the Social Market Foundation think tank reveals that heat networks – which provide energy from a single source and share it across several buildings – could be serving up to 900,000 homes.

This is almost double the most recent government estimate of 480,000 households, with one in 25 homes now thought to be part of a heat network, and one in 12 in social housing.

These households have not benefitted from the government’s Energy Price Guarantee, which typically caps bills at £2,500, since heat networks’ energy purchases are treated as business sales.

Most have been protected because heat networks tend to purchase energy at rates fixed for a year or two, however, as those deals expire, the report warns that households face bills doubling, or even increasing by as much as 700%.

One pensioner in Lambeth has already seen their heating and hot water bill increase from £700 to £3,500.

“The problems in heat networks disproportionately affect the worst off families,” the report’s author, Will Damazer, said. “They have to put up with higher prices, worse regulation and less control over their heating and energy use.

“Heat networks have a significant role to play to get the UK to net zero – but they are not living up to that potential.”

The report explains how a lack of metering in households served by heat networks is leading to excessive use and unnecessary costs.

Poor energy efficiency and high maintenance costs, and a lack of regulatory protection from Ofgem – since energy bills for those in housing networks are treated as housing service charges – are also key challenges, according to the report.

In order to secure a fairer deal for those living in heat networks, it recommends that the government:

  • Improve the bill support scheme, with more generous help, pegged to domestic energy prices, targeted help for schemes in deficit, and a cap on service charges
  • Accelerate the transition to metered networks, removing exemptions, increasing grant funding and encouraging the uptake of support
  • Set a target for Ofgem to start regulating heat networks by April 2024, and incentives to improve efficiency
  • Dismantle inefficient and outdated networks, mandating operators to run feasibility studies and providing funding for households in dismantled networks to transition to heat pumps

“The government has belatedly recognised the problem, and is starting to take action – but the scale and timing is not good enough,” Damazer continued.

“Increasing the pace of metering would not solve everything, but would be a crucial step in the right direction, reducing bills for households whilst helping the UK reduce its carbon emissions.”

Image credit: Shutterstock


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

UK’s net-zero economy grows by 9%

The UK’s net-zero economy grew 9% last year while delivering higher paid jobs than average and attracting billions of pounds in private investment, analysis by CBI Economics has uncovered.

28th February 2024

Read more

A consortium including IEMA and the Good Homes Alliance have drafted a letter to UK government ministers expressing disappointment with the proposed Future Homes Standard.

26th February 2024

Read more

Campaign group Wild Justice has accused the UK government of trying to relax pollution rules for housebuilders “through the backdoor”.

14th February 2024

Read more

Three-quarters of UK adults are concerned about the impact that climate change will have on their bills, according to polling commissioned by Positive Money.

13th February 2024

Read more

All major housing developments in England will be required by law to deliver at least a 10% increase in biodiversity under new rules that came into force today.

12th February 2024

Read more

The crisis engulfing nature poses a massive risk to the global economy. Huw Morris reports on how the finance sector is adopting new measures for disclosing business activities and channelling investment

1st February 2024

Read more

Fossil fuel companies may soon be forced to pay out billions for their role in the climate crisis. Trial lawyer Jeffrey B Simon tells Chris Seekings about his groundbreaking lawsuit in the US

1st February 2024

Read more

Decarbonising the global economy will require a financing shift of historic proportions. Vivienne Russell assesses the scale of the challenge, the barriers and the opportunities

1st February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close