What's the impact of our policies on household energy bills?
Reductions to consumer bills
Since 2010 there have been several announcements that will reduce the cost on consumers' bills by 2020 when compared to analysis published by DECC in July 2010. These are:
- Funding the Renewable Heat Incentive through general taxation rather than a levy on the supply of fossil fuels
- Considering several alternative funding options for providing financial support for the Government’s Carbon Capture and Storage commitments as it was announced they would not be funded through their own levy on the supply of electricity
- Re-banding the Renewables Obligation to get more capacity for less impact on consumer bills
- Reforming the electricity market to bring on low carbon for less in the long term
- Setting up the Green Deal to upgrade the nation’s homes with no upfront cost
- Deciding to make £40million saving in 2014/15 on spending for the small-scale Feed-in Tariff (FIT) scheme
- A cap on the cost of policies funded through energy bills.
By 2020
- By 2020 households will, on average, save money (£94 or 7%) on their energy bills compared to what they would have paid in the absence of policies.
- The impact of policies in helping people to save energy, or use it more efficiently, is expected to more than offset the impact that policies delivering low carbon investment will have on energy prices
Infographic:
See at a glance - by clicking on the image - where energy & climate change policies will add to and reduce the average household bill in 2020.
vulnerable households
- Poorer households are typically hit hardest by rises in energy prices. However, a number of Government policies take special account of the needs of low income and vulnerable households.
- Policies such as the Warm Home Discount (WHD) and part of the Energy Company Obligation (ECO) are targeted at low income and vulnerable households – helping them to heat their homes more affordably and to a more adequate level.
- As a result, average energy bills for the poorest 30% of households are expected to be 7% lower as a result of policies in 2020, compared to in the absence of policies.
Current action to help vulnerable households warm at an affordable cost
- Helping low income and vulnerable households keep warm and tackling fuel poverty is a priority for the Government.
- Current action to help some of the poorest and most vulnerable keep warm at an affordable cost includes:
- Improving the energy efficiency of homes through the delivery of heating systems and insulation through:
- - Warm Front
- - the Community Energy Saving Programme (CESP)
- - and the Priority and Super Priority Groups of the Carbon Emissions Reduction Target (CERT).
- Requiring energy suppliers to provide up to £1.1bn worth of direct support on energy bills through the Warm Home Discount (WHD) scheme, which is expected to help around 2 million households per year.
- The Green Deal and Energy Company Obligation (ECO) which will consult on options to improve the thermal performance of the homes, including those of low-income and vulnerable households.