By Liz Lainé, Senior Policy Advocate for Sustainability at Consumer Focus
It’s Big Energy Week, so it seemed worth looking ahead to see what consumers face in what could be a big energy year. In 2011 you probably saw your energy bills go up. The average energy bill rose over 21 per cent, and the number of customers entering new debt repayment arrangements rose by 20 per cent and 25 per cent for gas and electricity customers respectively.
Some media have focused on green taxes as the driver of rising bills, but the true driver has been the international price of fossil fuels. Prices should fall as gas and electricity prices have hit a 20 month low, and we have seen some price cuts this week, but the tough economic climate will continue and energy prices are expected to continue to rise in the long-term. For these reasons we do not expect to see consumer and political concern about energy bills diminish, and instead expect to see a greater focus on new energy products and services, complete with marketing efforts to make them attractive to consumers.
Our biggest concern is that in this rush to attract the ‘able-to-pay’ to new energy efficiency services, Government will leave behind the most vulnerable consumers as they cut public funding for fuel poverty programmes in England and support for basic measures in social housing.
Here are our 10 predictions for what 2012 will bring for energy consumers:
1. Reduce use We will continue to see consumers turning down their thermostats and wrapping up to take control of their energy bills
2. Shift use We estimate 20 per cent of customers already use basic time-of-use tariffs such as Economy 7, but expect suppliers to pilot many more options in 2012 to encourage shifting use to different times or to reduce use
3. Smart use? By the end of 2012 suppliers aim to have at least two million smart meters installed with the majority of customers having an energy monitor provided with their meter — but it is not yet clear how consumers will respond
4. Social housing left behind 2012 could be the last year for social housing to benefit from support for basic energy efficiency measures, but homes will remain unimproved where local authorities cannot provide matched funding or where improvements are prohibited by planning law or prevented by the presence of existing measures
5. Government shrink help for the most vulnerable After 30 years, 2012 is the last year of public-funded support for fuel poverty programmes in England (they will continue in Scotland and Wales). Campaigners will increase the pressure to raise and spend funds fairly
6. ‘Able to pay’ are encouraged to pay In advance of the Green Deal we will see more and more companies testing ways to make energy efficiency aspirational, going beyond cost and carbon to quality and comfort as they seek to identify viable commercial offers
7. Energy efficiency seen as an investment A number of developments in 2011 suggest that energy efficiency will be a greater factor in property investment decisions: the ban from 2018 on renting out EPC Band F and G properties; improvements to the EPC content, format, and its provision to clients; and the Financial Services Authority recommendation in its Mortgage Market Review that banks scrutinise household expenditure and bills in their lending tests
8. Renewable heat emerges in off-gas areas While the change in the feed-in tariff may dent confidence, we expect to see more take-up of renewable heating systems in off-gas areas, particularly in Scotland, as running costs get competitive regardless of subsidy
9. A sense of community Consumers are more likely to be attracted by community scale renewable schemes following changes to the feed-in tariff scheme, while groups of consumers may form to use their buying power to negotiate better energy tariffs
10. A slow start to the Green Deal Green Deal products will come online towards the end of the year, but we only expect a gradual take-up starting with typical early adopters, particularly those who are more energy conscious. A slow start is not a bad thing if consumers are satisfied and share their positive experiences with others