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Working from home: Who pays your heating bills this winter?

Home workers have been absorbing some of the costs of employers, and the coming winter will see these ratchet up

If the pandemic has you working from home you're effectively running a branch office. But who's paying the bill?

Workers everywhere are absorbing employer costs like rent, broadband, phone, printing, not to mention coffee. With the first winter of national home working ahead, expect your heat and light bills to go through the roof.

One provider has already upped prices, others may follow. Electric Ireland, the power supply subsidiary of State-owned ESB, will increase electricity charges by 3.4 per cent from October 1st, adding €2.88 to the average household bill.

Working from home was all very well in summer when you could schlep about in shorts with no need for a heater or a lamp. May and June are Ireland's sunniest months with sunshine of up to 6.5 hours, according to Met Éireann. By December it drops to an hour in some counties. Temperatures wane too, of course, with midlanders bearing the brunt.

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Before the pandemic housing estates would disgorge residents to work and school by 8.30am. Homes shuttered and dormant by day don’t run up energy bills. But with many householders now set to homework through winter, greater daytime usage, when energy is most expensive, will go up. Data from the first months of lockdown gives us a taster of what’s to come

"If you look at the initial three months of lockdown, March would have seen close to a 4 per cent increase in domestic electricity consumption compared to last year, in April it was 4.7 per cent, and in May it was 10.5 per cent," says Karl Richardson of Commission for Regulation of Utilities (CRU).

"We would normally see a decrease in quarter one and two because there is more light during the day and less heating required. This does buck the trend, and primarily it's related to people spending more time at home."

Energy providers love complacent customers: they don't know what their bill is, whether it's too much or when their contract ends

The biggest user of energy in any home is heating at 61 per cent, according to Sustainable Energy Ireland (SEAI) figures. This is followed by hot water at 19 per cent, lighting and appliances at 17 per cent, and cooking at 3 per cent.

Focusing on the biggest hitters will bring the biggest savings from changed behaviour this winter.

Switch to save

The best thing you can do to save electricity costs is to switch provider. A report from the CRU shows that if a customer had switched to the best available discount tariff each year for the past four years they could potentially have saved up to €726 on electricity, €494 on gas and €1,343 on dual fuel bundles over the period.

The pandemic, however, has seen a drop-off in switching, with 10-12 per cent fewer people making the move compared to the same period last year.

“Looking at the prices and the offers, there was still excellent value for people to make between €300 and €400 savings on their electricity bill if they switched,” says the CRU’s Richardson. Not a bad return for an hour spent checking a switching website and calling your supplier.

“By switching you will offset any costs from increased consumption or any increases from your supplier, so switch or renegotiate,” he said.

The estimated energy bill for a three-bed house with four people living in it is between €1,200 and €1,400 a year, he says. Knock €400 off that and you’ve got the price of a takeaway every Friday night until Christmas.

Energy providers love complacent customers: they don’t know what their bill is, whether it’s too much or when their contract ends. Do yourself a favour and set an alarm on your phone to call your provider six weeks before your contract ends. Then call and ask what’s the best deal they can offer based on your consumption. They are not bound to give you the best offer first, so expect to haggle.

Comparison sites like powertoswitch.ie, bonkers.ie or switcher.ie can help you shop the market.

Some 50 per cent of residential customers have never switched, according to Brendan Halpin, of switching service WeSwitchU.ie. The perceived hassle puts people off.

If €400 in savings isn’t incentive enough to do the legwork yourself, his service will do it for you. It will automatically switch provider for you every 12 months, matching your energy usage to the best tariffs.

“When people don’t switch they are moved from the attractive and cheapest introductory rates to the most expensive standard ones,” Halpin says.

Stop the lights

Once you’ve bagged the cheapest tariff the next step to shaving money off your energy bill is you. Many employers are enjoying super savings right now with their entire workforce being at home. Near empty buildings mean lighting, heating, air-conditioning and water heating as well as the energy to power lifts and devices are all either powered down or off. That’s a saving of thousands every month.

Home workers, however, have been absorbing some of these costs, and winter will see them ratchet up.

Laptops, monitors, printers and scanners are relatively low in energy use, especially if left in energy saving mode when idle

"In a home where parents are out working and children are at school, energy demand tails off at 8.30am and comes back on at 4.30pm, but now that's likely to flatten," says Tom Halpin of SEAI.

Where there is home occupancy throughout the day, knowing which appliances use the most electricity and being smart about their use will keep costs down.

A good rule of thumb from the SEAI is that if it makes things hot then it uses a lot of electricity, for example, electric showers, kettles and hair dryers. Seven to 10 minutes in an electric shower uses one unit of electricity, as does 20-40 minutes of tumble drying, or four to six hours of using a desktop computer and monitor.

If you haven’t got a clothes line get one. Wind and sun are free, and we do get some in winter. Darting in and out with the washing will give you a break from the desk too.

Power showers are one of the top five energy users in the home. No longer rushing for a bus or train, don’t let dawdling longer in the shower become a thing. Reducing your shower time by five minutes could save around €50 a year, according to the SEAI.

Laptops, monitors, printers and scanners are relatively low in energy use, especially if left in energy saving mode when idle or turned off when not in use, says Halpin. People should know to turn off unnecessary lighting too.

But heating is where home workers will make big savings or losses.

The heat is on

Last winter your house might have got a blast of heat for the morning rush from 6.30am until 8am and again in the evening. Working from home shouldn’t mean leaving it on everywhere all day, however.

Those working from home in newer builds or retrofitted homes can enjoy a warm glow of smugness this winter

“You certainly don’t need the heating on in the bedrooms during the day, or you don’t need it on in the living room during the day,” says Halpin.

He says you can reduce your heating bill by 10 per cent by lowering your room temperature by just one degree. However, it’s important to have some comfort level in the room you are using.

“We would say living space at 20 degrees, circulation space 12 degrees and bedrooms 16-18 degrees,” says Halpin.

You might want the space where you work at home to be at 18 degrees. “Energy saving isn’t about going without, it’s about using it when you need it, and not when you don’t need it.”

Smart heating controls in modern homes split the house into zones. But there are 2.1 million homes in Ireland and about as many different types of heating controls.

Most houses are not that energy efficient. About 78 per cent have a BER energy rating of C2 or worse. Homes built since 2011 are distinctly more cosy and cheaper to heat. The problem is the two million homes built when standards were much lower.

Those working from home in newer builds or retrofitted homes can enjoy a warm glow of smugness this winter. Department of Housing figures put the average heating bill for energy efficient homes at about €400 a year. That’s about a third of the heating bill for an average C-rated, three-bed semi-detached house.

Invest to save

Working from home in a cold or expensive to heat house may be the tipping point for many to retrofit. The first step is to get a Building Energy Rating (BER). This should suggest specific works to improve heat loss and your rating. Insulating your attic and walls are likely to be the first priority. Your heating system is next.

You are entitled to claim 10 per cent of heating, lighting and broadband bills for those days that you are working from home

If you can afford the initial outlay to retrofit, the return in heating costs will come over time. Just not in time for this winter, perhaps.

If you don’t have heating controls there are lots of great systems on the market now that allow you to manage your heating schedule smartly, even from your smart phone. SEAI offers a grant of €700 to finance this upgrade.

If you have a boiler, get it serviced ahead of the heating season. It will run more efficiently and safely, as well as reducing fuel consumption by 10 per cent. Ask your plumber to explain the settings. You can reduce the boiler thermostat in mild weather.

Claim it back

Six months on from initial lockdown and the official advice is that “remote working continues for all that can do so”. With no firm timeline for a vaccine, this working from home lark could go on and on. Employers with office leases up for renewal may even be weighing up the savings of shifting some operating costs permanently to remote workers.

Employers can pay workers an allowance of €3.20 a day to compensate for home expenses without paying any tax, PRSI or the universal social charge (USC) on it. If your employer can and does pay more than €3.20 per day to cover expenses you will pay tax, PRSI and USC as normal on anything above that figure.

If your employer does not pay you an allowance you can make a claim for tax relief from Revenue. You are entitled to claim 10 per cent of heating, lighting and broadband bills for those days that you are working from home. This is claimed at the higher, or marginal rate, of tax that you pay.

Meet Peter. He works from home for six months while his office is closed due to the Covid-19 emergency. During that time his household bills for heating, electricity and broadband come to €1,000. At the end of the year he can claim tax back on expenses of €100. The amount he gets back depends on his rate of tax. As he pays tax at the lower rate of 20 per cent, he will get €20 back from his taxes. No Friday night takeaway for Peter then.