Insult Britain

Insulate or DIE! They cry.

To insulate your home seems like a perfectly rational plan. The more you insulate your home, the less energy you will use keeping it warm over winter.

But there is the question of cost effectiveness to consider. If the outlay on insulation was cost effective, we’d all be doing it. But Insult Britain probably don’t care how cost effective insulation is: they want the government to pay for it. (Naturally, that means that we will all pay for it, but that the bill will be socialised; a bit like those “free” smart meters.) Would it be a cost-effective use of taxpayers’ money?

Thinking along these lines, I wondered exactly how much we ordinary folk could save by insulating our homes. Just what was the potential saving? Half the bill? A quarter? To listen to Insulate Britain’s spokespeople you would assume that the potential must be very high indeed, that insulation was a miracle cure for poverty. Is it? It seemed obvious to me that insulation must follow a law of diminishing returns – cheap and effective things are easily done, but addtional measures become more expensive and less effective. And that’s without considering the attendant perils of damp.

It ought to be possible, I thought, to work out what proportion of our energy bills could be gripped by extra insulation, and in so doing work out what the potential savings might be.

For a dual-fuel household, bills have a number of parts. First is the unavoidable standing charge on both gas and electricity. Then, assuming that the household has gas central heating, the remaining energy is divided thus: electricity; gas for hot water and cooking; and gas for space heating. Only the latter subset can be reduced by insulation. But what proportion of a bill is it?

Gas vs Leccy

A typical household with gas central heating obtains a lot more energy from gas than from electricity. Ofgem says this is 12000 kWh gas and 3100 kWh electricity. So it’s roughly 4:1.*

A very old (2014) DECC statistical release showed total domestic use in the UK as 43,794 thousand tonnes of oil equivalent (a horrible metric, but still). Of that, 28,728 was used for space heating: therefore, roughly 2/3 of the energy used was for heating.

Of course, gas is (still) cheaper than electricity, so if you used gas for heating you would have spent less than if you used electricity (the leverage available to heat pumps notwithstanding; in any case there weren’t many of these back in 2014).

According to DECC back when, ¾ of gas use was for space heating. Now, this is a good moment to insert a caveat: this figure does not relate to a typical home, but to the average home. There are differences in the way households are set up. Even those with gas central heating might have electric cookers. Some folk are still using gas fires. And so on. But handwaving madly, that means the pseudo-typical home is using 9000 kWh of gas for heating, or at least that’s what I’m saying it’s using. (Edit: this doesn’t matter really here because the data on energy savings appear to relate to the entirety of the gas usage, not just the heating element. The latter figure would be harder to obtain.)

All this means that as a first pass estimate, insulation can work on ¾ of gas use.

Now, what sort of savings might we expect from our new insulation? My assumption is that there is no point at all talking about loft insulation: does anybody know anybody who doesn’t already have it? And that applies to social housing and rental as well as owner-occupier places. As I said: the easy stuff has been done. But say what you like about BEIS (go on, say it), they do produce a lot of data, and they make it available, if you search diligently enough. BEIS have a scheme called NEED, describing in detail how their policies have increased poverty in the UK. (Actually it stands for National Energy Efficiency Data Framework, and uses empirical data to measure the effect of energy saving measures; data here.)

Here we can find the effect of fitting loft insulation: a reduction in gas usage of 2.6% (mean; median is 3.7%). Other measures are better, one suspects because most of us don’t already have them. That hideous solid wall insulation glued to your house will save an average of 17% of your gas usage.

But BEIS go one better: they produce more detailed statistics showing how the benefits of energy saving measures vary by the properties of the home. Thus fitting loft insulation to a home with an EPC (energy performance certificate) rating of A will only save 1.4% on your gas usage (but, one can’t help wondering: how does a house achieve an “A” rating without loft insulation?)

The professional eye might notice some oddities about the table. Like the way that although the overall mean saving of gas is shown as 2.6%, the lower quartile is -12.9%. In other words, the data is extremely messy and the error bars are rather wide. Other tables (not shown here) show that detached houses achieve a better saving from adding loft insulation than mid-terraced houses (5% vs 1.4% mean savings) and that for some odd reason private renters increase their gas use after fitting loft insulation (-0.4% percentage saving on average).

But the overall averages look like useful guides. If we add the energy efficiency measures up, we get 3.8% savings from fitting our condensing boiler, 8.1% for cavity wall insulation, 2.6% for loft insulation and 17.0% for solid wall insulation: that’s 31.5% in savings. Not bad? Well, maybe. Except people tend to already have most of those things, the exception being solid wall insulation, which will save you that 17.0%. [Speaking personally for a minute: our house has cavity wall insulation in the bits of wall that actually have a cavity (a 1980s extension); we have loft insulation and a condensing boiler. So for me personally the potential is 17%, except it isn’t, it’s 14.4% because our house is a mid terrace (so says another of the many BEIS tables).]

We are now beginning to get a sense of what is possible: somewhere about 17.0% saving in gas usage for a “typical” home, but varying up to about 31.5% if you have no insulation in the loft, empty cavity walls, and an old back boiler.

The “typical” situation therefore gives a saving of 17% on 12000 kWh of gas (in drafting this a minute ago I was only applying this to the “space heating” part, but the figure relates to all gas usage), and the price cap “default tariff” is £0.15/kWh. That’s 17% of {12,000 kWh x £0.15/kWh} £2,040, or £306.00. Not a trivial sum if someone were to just trim it off your bill or put it in your hand, but of course that isn’t what we’re talking about here. We’re talking about making an investment now to save that potential £306.00 each year on your gas bill. What sort of investment? I must confess I have no idea how much solid wall insulation costs. I’ll ask Mr. DuckDuck. Looks like £14,000:

So the payback time is… £14,000 / £306.00/yr = 46 years

Of course, this may not matter to Insult Britain, who are dealing with Other People’s Money. But if one is dealing with One’s Own Money, it is not a very good deal at all. And most people would prefer 14 grand in their hand rather than £306.00 a year for 46 years. In reality most people would borrow the sum, and the interest would likely exceed the annual saving, even in these times of stricture. Having spent your 14 thou, your annual bill from 1^st October, assuming no further changes, would be £3376.29 instead of the £3682.29 mandated by the price cap – a saving of 8%.

Now, the more expensive energy gets, the better the energy savings options seem. Like the way that pair of patent yellow leather shoes eventually starts to look like a roast turkey if you’re hungry enough.^ But if rationality ever returns to UK politics, we can look forward to a rapid drop off in energy costs. Can we? Please say we can.

Roll on Global Warming

Ovo put out an energy guide last year, which had an interesting comparison between European countries’ energy usage:

The moral seems to be: Don’t winter in Denmark, or do winter in Portugal. Note: the Ovo figure for heating is the same as the Ofgem figure for all gas use, including hot water and cooking. There is no footnote to say where the number comes from. But also on the global warming theme, elsewhere in that DECC document there is this statement:

From 2012 to 2013, space heating increased by 0.4 per cent. This coincided with a 0.6 degree Celsius decrease in average heating season temperature.

Things are looking up guys! On this basis, a mild winter (thanks to global warming) might even save us the cost of a pint.

Conclusion

If your house was perfectly insulated, your energy bill next year would be £2332, not £3682. The same applies if you switch off your boiler for the winter. In reality you’re likely to cut 8% from the bill with a £14,000 outlay.

Notes

*Ofgem reduced the electricity “typical domestic consumption value” to 2900 kWh a couple of years ago. The other value is still widely published I think, including at Ofgem. (They still use this to calculate the default tariff.)

^But don’t bury me in mine. See Nick Cave, “Higgs Boson Blues.” Just incinerate or compost me. Actually I’ve always thought sky burials looked cool. But I guess 21^st century humans are too toxic to feed to the birds.

That DECC data.