How much it will really cost you to go green

Energy bills are expected to fall from July as a decline in wholesale gas prices finally filters through to suppliers. But bills will still be far higher than before the invasion of Ukraine – and average households are unlikely to pay much less than £2,000 for some time.

It is no surprise then that many households are turning to energy efficiency measures. But initial costs are high and there are few subsidies.

The Government is currently consulting on a scheme to make energy providers allocate money for green home improvements such as insulation and replacing boilers with heat pumps. However, the grants will be available only to those on Universal Credit – primarily elderly homeowners. This means that most homeowners will have to meet almost all of the cost of green renovations themselves.

Here The Telegraph highlights how much these improvements will cost – and how quickly they will pay you back.

Heat pumps

The typical cost of an air source heat pump can range from £7,000 to £13,000, depending on the size of the property and whether changes need to be made to the heating system, according to the Energy Savings Trust. Ground source heat pumps are generally more expensive and can cost between £14,000 and £19,000.

However, this can be offset with a government grant – £5,000 for air source and £6,000 for ground source. Compared with an old (G-rated) gas boiler, a heat pump will save £590 a year, while the saving on a new A-rated one is £115.

At present, heat pump installation is the only energy efficiency measure the Government subsidises. The Boiler Upgrade Scheme is scheduled to run until 2025 and most homeowners in England and Wales are eligible to apply.

Insulation

The insulation a house might require depends on when it was built; it is considerably more expensive for older homes. Those built after the 1920s typically have cavity walls, which cost around £1,000 to insulate. This can bring big savings: a semi-detached home will make back £395 a year, according to the EST.

Solid walls, more common on older houses, cost about £12,000 to insulate externally and £8,500 to insulate internally, excluding redecorating costs. Floor insulation is between £1,600 and £2,900 for a typical “suspended” floor.

Whatever age your home, loft insulation is the cheapest and most recommended option. It costs £640 to insulate the roof of an average semi-detached house – which saves roughly £355 a year, the EST found.

Double glazing

Roughly 18pc of domestic heat loss is through windows, according to a report by the now defunct Department of Energy & Climate Change. Households could save £195 a year by installing double glazing, the EST found.

But at that rate of saving they will take close to 40 years to pay off: the typical cost for a full set of A-rated double-glazed windows is around £7,500 for a two-storey semi-detached house. However, their installation will improve a house’s Energy Performance Certificate rating by five to 10 points.

Solar panels

A set of solar panels costs on average £5,500, according to the EST, although it depends on the type of panel, the size of the area covered and any difficulties with access to the roof.

Households that have already installed panels have seen varied returns, as there are several ways to maximise their value.

Some opt to export surplus power back to the grid as part of the Smart Export Guarantee, although how lucrative these schemes are has varied. While previous schemes paid up to 40p per kWh, most now pay around 5p – a rate far lower than electricity costs under the Government’s Energy Price Guarantee.

A small number of savvy homeowners have invested in batteries alongside their panels, enabling them to store the energy generated by their panels, which they can then use to power their home directly rather than sell it back to the grid at a low rate.

The payback for such a set-up is estimated to be between seven and 10 years – however, the upfront cost of such an investment can be as high as £14,000.

Electric cars and charging points

EVs remain more expensive than their petrol counterparts, while funding for their charging infrastructure has also dwindled.

Government support for installing EV charging points at privately owned houses is no longer in place; it was replaced in April 2022 by the EV charge point grant. This provides funding of up to 75pc towards the cost of installing smart charging at flats and other rented and shared properties. Installing a charging point costs £500 to £1,000, depending on the model.

EVs can also work to cut domestic energy bills by about £980 a year, according to Ovo Energy, a supplier.

This is made possible by ­vehicle-to-home charging, which allows EV drivers to power their homes using electricity stored in their EV’s battery, which charges at a cheaper rate overnight on an Economy 7 or EV‑­specific tariff.