High stakes in the energy markets
Energy has not been out of the news in the last year – and it’s not going to be.
Last month [Feb] British Gas owner Centrica announced profits of more than £3.3bn boosted by soaring wholesale gas prices, the product of underlying instability in the energy market – and that isn’t going to go away anytime soon.
Wholesale energy prices have been rising since the second half of 2021. This contributed to the 54% increase in the Energy Price Cap in April 2022, and what would have been an 80% increase in October, which would have added £1,600 to the ‘average’ household bill.
The Energy Guarantee may have bailed UK householders out in the short-term and avoided the 80% cliff edge, but it’s scheduled to run out in only a years’ time at the end of March 2024.
The current £2,500 ceiling also comes to an end from the start of April this year, with a switch to a higher rate of £3,000 for most householders.
This means that at best, we have one year to go, before the Energy Price Guarantee runs its course and subsidies are withdrawn, at a time when the Government is gambling wholesale energy prices will be lower, and bills will be more affordable.
This is an even bigger gamble for homeowners. What if energy prices don’t drop? In 12-months’ time they’ll face still painfully high energy bills. A further government subsidy is unlikely for all but the most vulnerable households on the basis that it costs too much.
As a homeowner that gives you 12-months to ‘put your house in order’ – literally – and to improve its thermal performance or face higher bills.
This means positioning around the contribution that new windows and doors can make to home energy efficiency is going to continue to resonate for the entirety of this year and well into 2024.
This in my view has been supporting the still solid levels of demand that the window and door industry has seen in the first quarter of this year.
Despite the lacklustre performance of the UK economy there hasn’t been a major drop in demand, the market tracking at not dissimilar levels of demand to levels which we saw at the same time last year.
The Government’s commitments to tackle climate change and lower carbon emissions from UK homes, are also driving a raft of new regulatory requirements and further revisions of Part L under the Future Homes Standard.
The opportunities are there for the taking if we engage the end user today, and work effectively with government to secure new opportunities tomorrow. We should be confident.