Families could see their energy bills fall after government ministers yesterday revealed plans to cut green subsidies.
These climate change subsidies – used for projects such as wind and solar farms – add a significant amount to a household’s annual energy bill, and is the government’s way of making Britain a low-carbon economy.
Billions of pounds are handed out by the government each year to wind farm and solar energy firms, but ministers yesterday agreed that the subsidies were too expensive and that they wanted to minimise the cost of green projects to families and businesses.
The government admitted that the levies add around £110 to the annual costs faced by families.
According to price comparison site uSwitch.com, around 8 per cent to 10 per cent of a household’s energy bill goes towards green subsidies.
An official government review will be held later this year, after which the subsidies could be cut.
The Department for Business said: “Subsidies and other forms of state support have played an important role in creating markets in new technologies and driving down their costs.
“But it is important that we move steadily to an operating model in which competitive markets deliver the energy on which our country depends.”
According to The Telegraph, the National Audit Office said that despite government attempts to cut wind and solar energy subsidies, household energy costs might not fall by £110 a year because the government has decided to exempt heavy industry from some of the costs and make households pay a proportionately higher share of the bill.
It remains to be seen how much bills could fall in the coming years, but in the meantime you can reduce your gas and electricity bills by taking a few simple steps.
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