The least energy-efficient UK homes could face an extra £390 cost via the ‘leaky homes surcharge’ when the energy price cap rises in April, Shrinking Footprints research said.
1.5mln households with an F or G energy rating may be subject to the additional cost, while those with an E-rating could see annual heating bills rise £320 more than those with a C-rating, Sky News said, citing the report.
Poorly-insulated homes have always been more expensive but this surcharge could add £3.9bn to bills for D-G rated homes.
Jonny Marshall, a senior economist at think-tank Resolution Foundation, said: “Almost six million households will face a £320 'leaky homes surcharge' on their energy usage as a result.
"It is vital that the government ramp up progress in insulating homes and reducing the costs of public charging points for electric vehicles so that the whole of society can benefit financially from a low carbon economy."
This comes following a February announcement from Ofgem that energy bills will be surging 50% from April when the price cap change is implemented (read more).
The report said 80% of the investment in home insulations would be needed by 2035, despite the number of walls and roofs being insulated today being “down 90% on a decade ago.”
Meanwhile, 72% of low-income homeowners need adjustments to insulation, but the cost of upgrades could be up to £8,600 – just £500 less than their after-housing-costs income, the Resolution Foundation added.