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

But a row over wind farms spoiling the campaign dampened ministers’ enthusiasm for a big expansion of onshore wind, with no new targets set, and experts lamented the strategy’s complete lack of isolation. This is despite a recent study finding that upgrading a home’s energy rating from D to C could save £200 a year. Ministers say they have already pledged £6.6billion to improve energy efficiency and decarbonise heating during this parliament.

The government unveiled direct support for families, but in a separate announcement. Rishi Sunak, the Chancellor, previously announced that all households would get a £200 cut on their energy bills in October, but this will be paid back over five years from 2023. A further £150 will be provided free of charge to those municipal tax brackets A to D. .

However, some think tanks have called on 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 that in the recent spring statement or in the energy strategy.

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

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

Experts generally welcomed the strategy’s longer-term goals. 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 fluctuations in the global market.

If all goes according to plan, only 5% of our electricity bill will be exposed to gas prices by 2030.

Setting goals is one thing, but achieving them (and paying the bill) is another. What has been announced so far is light on financial details, apparently because the Treasury has refused to back major spending increases.

A £120million ‘future nuclear activation fund’ is due to be launched this month, although it is unlikely to come close to the overall amount needed.

Meanwhile, the government has pledged to hold a ‘heat pump investment accelerator’ competition this year to award funding of up to £30m. It will encourage businesses to design proposals to reduce the cost of heat pumps, which can cost up to £18,000, helping to encourage households to move away from gas boilers.

The strategy will help unlock £100bn of private investment in Britain’s energy sector, the government adds.

Should I install a heat pump or solar panels for my house?

This is certainly what ministers are encouraging people to do, if they can afford it. In his latest spring statement, Rishi Sunak reduced VAT on energy-saving measures such as heat pumps, attic insulation and solar panels to zero.

This should save a typical household around £1,000 on installing solar panels, £500 on heat pumps and around £160 on loft insulation. Overall, the Treasury estimated it could help reduce annual energy bills by £300.

In the meantime, the government has launched a scheme to give households grants of up to £5,000 to buy heat pumps, which can cost between £6,000 and £18,000. A maximum of 90,000 grants will be awarded over three years.

What else can I do to reduce my bills?

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

There are a lot of things you can do besides just turning down the thermostat. Read it here.

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This notice was published: 2022-04-07 10:44:56

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