Switching to electric-powered heating can slash energy bills in new homes

Using electricity rather than gas to power new homes could cut energy bills by as much as 40 percent, according to a new report we worked on with the Sustainable Markets Initiative. It will also significantly reduce carbon emissions, helping us on our journey to net zero.

Published: 23/07/2024

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Domestic heating is responsible for around 18 percent of UK carbon emissions, so building what are known as cleantech homes, with electric heat pumps rather than gas heating is a vital stepping stone to a sustainable future.

As the owner of more than 108,000 homes, we’re already doing what we can to reduce our carbon footprint. We’re improving the energy efficiency of our homes by adding new insulation, windows and more efficient boilers. And we’ve pledged to phase out the use of gas boilers in new homes. 

Cleantech homes have solar panels, batteries and heat pumps. They aren’t connected to the gas grid and don’t use any other fossil fuel for heating. The energy generated can also be stored in batteries and used to manage the demands on the grid. Once the National grid achieves its 100 percent clean energy target – currently set for 2037 – cleantech homes will be net zero.

The report, published earlier this month, provides the new government and developers with a blueprint for building more affordable, sustainable homes. It shows energy bill savings offset the higher building costs, generating savings of as much as £18,500 per home over 25 years. Cleantech homes are also healthier as they don’t have any of the harmful gas emissions that can increase the likelihood and severity of asthma and other respiratory diseases.

Greg Jackson, founder of Octopus Energy, who we worked with on the report, said: “Homes with heat pumps, solar panels and batteries can make big bills a thing of the past. Sometimes we can eliminate power bills completely.”

The housing industry is making progress. Nearly a fifth of new homes now have heat pumps and over the past two years, more than 11,000 people have been trained as heat pump engineers. But this is not enough. Progress must be quicker if we’re to meet the government’s goals of being net zero by 2050. 

Richard Ellis, Director of Sustainability at Peabody, said: “We’re working hard to reduce our carbon footprint and lower bills for residents. We’ve laid out how we plan to become a net zero organisation in our Sustainability Action Plan, highlighting in detail what we’ll do over the next three years, including improving the energy efficiency of our own heat networks.”

The Sustainable Markets Initiative was founded by King Charles III in 2020 at the Work Economic Forum. Its mission is to build a coordinated global effort that puts nature, people and the planet at the centre of value creation.

Read the full report