With the Energy Price Cap changing in January, is now a good time to invest in a heat pump?

What’s the Energy Price Cap?

 

First, let’s look at what the Energy Price Cap is and how it works. The Price Cap was introduced on 1st January 2019 by Ofgem. It limits what you pay for each unit of gas and electricity that you use. It also sets a maximum daily standing charge – that’s the sum you pay to be connected to the grid. The Price Cap changes every three months, in January, April, July and October. On the 1st January 2024 the Price Cap is set to rise to £1,928 a year. This is up 5% on the current October 2023 Price Cap, which was £1,834 a year. The Price Cap only applies to standard and default tariffs, which are generally known as standard variable tariffs (SVTs). So if you’re on a fixed-term tariff, the Cap won’t affect you.

 

Why it’s a good time to invest in a heat pump

 

The rising cost of gas means alternatives to gas, coal, oil and Liquid petroleum Gas (LPG) is something worth seriously considering. According to the Energy Saving Trust, if you’re replacing an older, G-rated gas boiler, then you could currently save around £295 a year on your energy bills.1 The saving will be even greater come the new year when the new Price Cap comes into effect.

 

If you’re considering switching from oil central heating to a heat pump, you can also consider the cost and time savings of not having to buy and store oil in bulk and pay for delivery. And if you’re replacing old electric storage heaters with a heat pump system, then, according to the Energy Saving trust, you could save up to £1,500 on your annual fuel bill.

 

You’ll see even greater savings is you already have solar panels, as you can save money by using the free energy that they generate to power your heat pump. And if you have a solar battery, this can increase your saving further, as it will store the sun’s energy to power your heat pump later in the day. 

 

Grants to help pay for your new heat pump

 

Don’t forget you are also likely to be eligible for sizeable grants towards paying for your new heat pump. If you live in England and Wales, the UK governments Boiler Upgrade Scheme (BUS) offers grants up to £7,500 towards the cost and installation of a heat pump.2 If you live in Scotland the Home Energy Scotland Grant Loan offers funding up to £7,500 or £9,000 for households which qualify, with additional funding available as an optional interest-free loan.3

 

If you’re considering investing in a heat pump, then find out how much you could save with our heat pump cost calculator. With a nationwide team of accredited engineers who are all trained at our in-house training academy, you can be confident your heat pump installation service will be delivered by a friendly team of experts. Get in touch today, and let’s get you started on your journey to a more sustainable future. 

 

Source ref

 

1 https://energysavingtrust.org.uk/is-now-a-good-time-to-get-a-heat-pump/

 

2 https://www.gov.uk/apply-boiler-upgrade-scheme

 

3 https://www.homeenergyscotland.org/funding/grants-loans/