Geopolitics is not an area that the majority of householders have ever cared much about, but the impact of war in the Middle East and elsewhere on oil and gas prices has turned more of our minds towards the problem of energy security. And that's because it's beginning to hit our energy bills.
Electricity prices have risen by 30% since 2003 and gas by 40%, says EnergyWatch. According to the Energy Savings Trust, the average household now spends £870 a year on fuel and power, but according to a spokesperson, "could save up to £300 a year from the installation of energy-saving measures and by changing behaviours with regard to the use of energy". For those of us being pushed to the borders of frugality by rising mortgage repayments and council taxes, that's a significant saving.
But far from installing windmills on your roof, there are cheaper, more mundane means of cutting costs in the long term. That's because many renewable energies are still in their infancy and at a relatively early stage of development, says Donnachadh McCarthy, a leading eco-consultant. "Most renewables will not save you money. They require an initial single amount of capital, which will not make them financially feasible in their lifetime." Wind turbines are especially expensive, he says, and can cost anything from £3,500 for a basic model to more than £8,000.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Another thing to look out for is the consultants plugging new and expensive technologies. Kevin McCloud, presenter of Channel 4's Grand Designs, warns that many consultants are also agents for the companies that make these emerging technologies. "If it's a large project, get your architect to check them out," he tells The Sunday Times.
But money can be saved, and properly insulating your home is one of the best ways to do so. Of energy used in your house, 88% is for heating and about 50% of the heat lost in your home leaks through lofts and walls. Installing ten inches of loft insulation can save you about a third on heating charges. That will cost no more than £220-£250, saving you around £80-£100 a year. Similarly, cavity wall insulation can reduce heat lost through walls by 60%, which translates as a saving of £130-£160 a year for the average home. It will cost around £260-£380 to install.
Ofwat, the economic regulator for the water and sewerage industry, has calculated that the average unmetered water customer who switches to a meter saves an average of 5%-10% on water bills. Price comparison website Uswitch.com claims more than 14 million water customers could save up to £125 a year by switching.
According to Peter Mandich of Ofwat, meters are a great idea: they cost nothing to install and can be removed within 12 months of installation if you're not happy with them. He advises speaking to your water firm beforehand to ensure the jump is right for you. Alternatively, visit Uswitch.com to calculate whether you can indeed save money.
McCarthy also singles out designer lights as real energy-wasters. "I visited a house the other day where they used 12,000 watts in lighting bulbs alone. My house uses 180 watts!" Low energy bulbs cost about £3 each. Similarly, low-energy fridges use about £20 of electricity a year, compared to £150 for normal ones.
Making your house energy-efficient can also make it easier to sell. According to a new survey from Yorkshire Bank, one in four home-buyers and one in three first-time buyers wouldn't buy a property if it was energy-inefficient. And such houses are going to be easier to detect, now that every house in England will be required to carry energy-efficient ratings, like the A to G categories on fridges from next June.
So no, you won't save a huge amount in the short term, or offset the carbon emissions puffing from a coal electric plant on the Ruhr valley. But making better use of energy in your home might make the difference when it comes to selling your house for the price you want.
How long it takes to make a saving when you buy:
Cavity wall insulation 3-5 yrs
Loft insulation 2 yrs
Wind Turbine over 30 yrs
Solar Energy over 30 yrs
Flueless gas fire 5 yrs
How high earners could boost their pension by thousands and cut childcare costs
Monzo launches 11 ETFs via Blackrock to help savers invest
