As part of his Autumn Statement, the Chancellor, George Osborne has announced changes that will be worth £50 on average to consumers all over the UK by reducing the impact of energy company price rises. These changes include a number of improvements to both the Green Deal and the Energy Company Obligation.
The saving is being achieved by looking at the Green Levies being imposed upon energy companies and how they can delivered in the most cost effective way. The Energy Company Obligation has seen changes to funding in ECO for Solid Wall Insulation and then the extension and focusing on measures such as Loft & Cavity Wall Insulation. The Green Deal will receive further support and incentives.
The announcement has been made in 2 main areas;
- Households will see an average saving of £50 a year without reducing help to vulnerable households or sacrificing Green commitments.
- £1,000 + is being awarded to people moving home to install energy efficiency measures.
the Government confirms it will reduce the current cost of levies by:
- Establishing a rebate saving the average customer £12 on their bill, for the next two years, worth a total of £600 million. The Warm Homes Discount will continue to help millions of vulnerable households receive a £135 rebate off their energy bill.
- Reducing the cost of the Energy Company Obligation (ECO), an insulation scheme delivered by major energy suppliers. This will result in £30-£35 off bills, on average, next year. The existing dedicated support in ECO for low income and vulnerable households will be maintained and extended from March 2015 until March 2017.
In addition, electricity distribution network companies 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 have confirmed that 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.
Full details are available here;