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  • Dismantle inefficient and outdated networks, mandating operators to run feasibility studies and providing funding for households in dismantled networks to transition to heat pumps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

EU and UK citizens fear net-zero delivery deficit

Support for net zero remains high across the UK and the EU, but the majority of citizens don't believe that major emitters and governments will reach their climate targets in time.

16th May 2024

Read more

There is strong support for renewable energy as a source of economic growth among UK voters, particularly among those intending to switch their support for a political party.

16th May 2024

Read more

Taxing the extraction of fossil fuels in the world’s most advanced economies could raise $720bn (£575bn) by 2030 to support vulnerable countries facing climate damages, analysis has found.

2nd May 2024

Read more

The largest-ever research initiative of its kind has been launched this week to establish a benchmark for the private sector’s contribution to the UK’s 2050 net-zero target.

2nd May 2024

Read more

The Scottish government has today conceded that its goal to reduce carbon emissions by 75% by 2030 is now “out of reach” following analysis by the Climate Change Committee (CCC).

18th April 2024

Read more

While there is no silver bullet for tackling climate change and social injustice, there is one controversial solution: the abolition of the super-rich. Chris Seekings explains more

4th April 2024

Read more

Alex Veitch from the British Chambers of Commerce and IEMA’s Ben Goodwin discuss with Chris Seekings how to unlock the potential of UK businesses

4th April 2024

Read more

Five of the latest books on the environment and sustainability

3rd April 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