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
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.
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.