What does the energy strategy mean for my gas and electricity bills?



But a row over wind farms spoiling the countryside has cooled enthusiasm among ministers for a big onshore wind expansion, with no new targets set, and experts have bemoaned the total absence of insulation from the strategy. That is despite a recent study finding that improving a home’s energy rating from D to C could save £200 a year. Ministers say they have already pledged £6.6bn towards improving energy efficiency and decarbonising heating over this parliament.

The Government has unveiled direct support for families, although in a separate announcement. Rishi Sunak, the Chancellor, previously announced all households will get £200 off their energy bills in October, but this will be paid back over five years from 2023. Another £150 will be provided for free to those in council tax bands A to D .

However, some think tanks have called for ministers to go further and scrap green levies and carbon taxes on energy bills, which could save consumers hundreds of pounds. There was nothing about this in the recent Spring Statement or the energy strategy.

This lack of short-term support for families is likely to remain a sticking point. Citizens Advice has predicted that millions of families will be plunged into poverty because of rising prices and energy bills this year.

What will the strategy mean for my bills in the long term?

Experts have generally praised the aims of the strategy in the longer term. By reducing Britain’s exposure to volatile gas prices, the idea is that our electricity supply will become more predictable and prices less exposed to global market swings.

If all goes to plan, just 5pc of our electricity bill will be exposed to gas prices by 2030.

Setting targets is one thing, but delivering on them (and footing the bill) is another. What has been announced so far is light on financial detail, reportedly because the Treasury has refused to back major increases in spending.

A £120m “future nuclear-enabling fund” is due to be launched this month, although that is unlikely to come close to how much cash is needed overall.

Meanwhile, the Government has pledged to run a “heat pump investment accelerator” competition this year to award funding of up to £30m. This will encourage companies to devise proposals to cut the cost of heat pumps, which can run to as much as £18,000, thereby helping to encourage households to ditch gas boilers.

The strategy will help to unlock £100bn of private investment in the UK energy sector, the Government adds.

Should I get a heat pump or solar panels for my home?

That is certainly what ministers are encouraging people to do, if they can afford it. In his most recent Spring Statement, Rishi Sunak cut VAT on energy saving measures like heat pumps, loft insulation and solar panels to zero.

That should save a typical household about £1,000 when installing solar panels, £500 on heat pumps and about £160 on loft insulations. Overall the Treasury estimated these could help to cut annual energy bills by £300.

Meanwhile, the Government has launched a scheme to provide households with grants of up to £5,000 to purchase heat pumps, which can cost anything between £6,000 and £18,000. A maximum of 90,000 grants will be provided over three years.

What else can I do to cut my bills?

My colleague Anna Tyzack recently covered this for Telegraph Money, with an excellent guide for households.

There is plenty you can do, besides simply turning down the thermostat. Read it here.


www.telegraph.co.uk

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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