Government to fund ECO following energy price cap announcement
UK Prime Minister, Liz Truss today announced a new energy price guarantee to ensure that households will pay no more than £2,500 a year for energy bills until October 2024. However, one thing that perhaps caught the industry’s eye, was the confirmed “scrapping” of green levies- something which is not as cut throat as it first appears.
What are Green Levies?
We like Ofgem’s definition of the green levy which is a social and environmental obligation used to pay for government energy policies/schemes. This includes the Energy Company Obligation (ECO). The levy was being charged as a small percentage of household energy bills.
Mainstream media has today been reporting that green levies have been temporarily scrapped which will remove the additional £150 charged on household energy bills each year. However, the government’s official press statement has provided more clarity on this matter.
This statement confirms that schemes funded by green levies (such as ECO) will now be funded by Government until October 2024, in order to ensure that the UK’s investment in retrofitting and renewable technology continues.
Elmhurst believes this is great news for the retrofit industry and for consumers. Funding streams such as the Energy Company Obligation (ECO), which funds things like insulations, will be unaffected by the changes and will continue to be delivered as planned.
Josh Wakeling, Head of Operations at Elmhurst Energy comments: “It is great news that today the Government announced that schemes previously funded by the green levies will continue to be funded by the Government. We must maintain the opportunity to fund energy efficiency measures and reduce energy bills, which is vital to tackling fuel poverty, improving fuel security and cutting emissions to help the country move towards its net zero carbon goals”
In addition to the energy price guarantee announcement, the Prime Minister also announced that the government will be launching a review to ensure the country can deliver net zero by 2050 “in a way that is pro-business and pro-growth”.
Read the official government press statement