Green levies roll back to help cut energy bills
Plans outlined by government include a £600m fund that gives the average customer a £12 rebate on their bill for the next two years. A further £30-£35 discount will come as a result of a reduction in cost to the big six for ECO (Energy Company Obligation). The existing dedicated support in ECO for low income and vulnerable households will be maintained and extended from March 2015 until March 2017.
The Warm Homes Discount remains in tact, with vulnerable households receiving a £135 rebate off their energy bill.
In addition, electricity distribution network companies say they are willing to take voluntary action to reduce network costs in 2014/15. This would allow a further one-off reduction of an average of around £5 on electricity bills, which energy suppliers will be able to pass on to their customers as well.
All of the major energy suppliers claim they will pass the benefits of this package to their customers. The reduction in individual household bills will depend on the energy supplier: Some companies have not yet announced price rises for 2014, or have limited their rise until the Government’s review of green levies concluded. Others have announced price rises and have indicated that they will reduce their customers’ bills as a result of these changes.
The value of the benefit will vary between companies, but, on average, this package, including VAT, will be worth £50 to households, compared to what would have happened without these changes.
The Government will also ensure that its overall approach is carbon neutral, with new measures that will boost energy efficiency even further by introducing new schemes for home-movers, landlords and public sector buildings, worth £540 million over three years:
• In future, when people buy a new home, they could get up to £1000 from the Government to spend on important energy-saving measures – equivalent to half the stamp duty on the average house – or up to £4000 for particularly expensive measures. The scheme will be available to all people moving house including those who don’t pay stamp duty, helping around 60,000 homes a year, over three years.
• Government will also introduce a scheme to support private landlords in improving the energy efficiency of their properties, which will improve around 15,000 of the least energy efficient rental properties each year for three years. Together, the homebuyers and private rental schemes will be worth £450 million over three years.
• £90 million over three years will be spent improving the energy efficiency of schools, hospitals and other public sector buildings.
The Government will also increase the funds available to local authorities this year through Green Deal Communities from £20 million to £80 million, to help support ‘street-by-street’ programmes for hard-to-treat homes in a cost-effective way, and will keep the Green Deal cashback scheme open, which will protect jobs in the energy efficiency industry before the new measures take effect.
Levies providing support for existing low carbon energy projects will not change, such as the Renewables Obligation (RO), Contracts for Difference (CfDs) and Feed-in Tariffs (FITs).
