Energy bills could fall by £75

British households could see their gas and electricity bills fall by up to £75 under new proposals to cut green subsidies

green home

A definitive decision on green subsidies is likely to be communicated in December

Following four of the UK’s big six energy companies putting up their prices by more than 8%, Prime Minister David Cameron has said he is determined to cut the green levies which are added to customer bills.

The government would require energy firms to guarantee any cuts in levies would be passed on to customers in full.

Any announcement regarding green subsidies is likely to be made during the Chancellor’s annual Autumn Statement, on December 4.

‘Stealth tax’

These charges, which were recently described as a “stealth tax” by Chief Executive of E. ON, Tony Cocker, have been partially blamed by energy companies for the dramatic increase in energy costs.

Green subsidies have been singled out by energy companies for adding £112 to the average gas and electricity bill. The subsidies fund schemes aimed at better insulating British properties as well as renewable energy developments.

ECO scheme to be targeted

The Telegraph has reported that senior government officials will focus their attentions on the Energy Companies Obligation (Eco) initiative. This scheme invests in improving the energy efficiency of people’s homes, particularly more vulnerable consumers.

Switching the funding of the ECO scheme from energy bills to general taxation could see Brits save up to £69 on the cost of their utilities.

An additional £6 will be shaved off the feed-in-tariff subsidy which reimburses homeowners who install solar panels.

Change in strategy will not affect ‘large-scale renewables or feed-in tariffs’

Speaking about the proposed changes in the House of Lords, Energy Minister Baroness Verma, confirmed that the review of green subsidies would not affect renewable energy investors.

This stance was reaffirmed by the government, with DECC issuing a statement that it would continue to increase year-on-year spending on renewables.

Read more

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Renewable sector welcomes assurances on green subsidies

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  • Kipperc50

    K need solar panels, I installed in Jan13 and have generated £1,000 of electricity and saved£400 on electric bill. Cost £9,600

    • Anth

      you must sit in house a lot then using solar power, working families will not save much as most people use more electric when its dark and on an evening. Most peoples electric use involves a fridge and a couple of things on standby. Dont install them do you

      £400 seems a bit of an exaggeration, i used to install and check them in the winter they were lucky to get 5kwh a month. they are rubbish with no subsidy and decrease in efficiency every year. For anyone thinking of buying, they do work but you have to plan your electric use to get most benefit. the subsidys are getting cut but they are cheaper. Be aware though any shading at all has very serious impact and the figures they quote are usually from down south where you get more sun. Northern England for example receives much less output. Without the feed in tarrifs they are not worth the money at all and with the tarrif you will probably be disappointed

  • Kipperc50

    You get paid 17.5p for every unit you generate, and an extra 5.5p for every unit that is exported. Since they were installed in Jan 13 the income generated by the panels in £1,000.
    With regard to savings on our electricity we now use washing machine etc during the day, and my direct debit last month was £34. Two years ago my average monthly electric bill was £93/month. I stand by the figure of electric savings of £400 for the year

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