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Acknowledged
The current apportioning of environmental levies disincentivises the switch to electrified low carbon heating solutions,...
Conclusion
The current apportioning of environmental levies disincentivises the switch to electrified low carbon heating solutions, such as heat pumps, because the running costs are greater than a gas boiler. As we have seen with the ongoing gas market crisis, increases in gas prices have increased energy bills, which has, in turn, disproportionately affected the fuel poor. The reapportioning of environmental levies should not further burden the fuel poor with an even greater increase in energy bills. We welcome the Government’s commitment in the Net Zero Strategy to shift or rebalance energy levies.
Government Response Summary
The government acknowledges the disincentives in current electricity and gas pricing, commits to keeping costs fair, and states they are exploring options to shift or rebalance energy levies away from electricity, with proposals to be published in 2022.
Paragraph Reference
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Government Response
Acknowledged
Government Response
Acknowledged
HM Government
Acknowledged
Government recognises that current pricing of electricity and gas does not incentivise consumers to make green choices, such as switching from gas boilers to electric heat pumps. We are committed to keeping costs fair and affordable for industry and consumers, and working to identify how costs can be allocated in a way which incentivises consumers to make green choices. As set out in the Heat and Buildings Strategy, we want to reduce electricity costs and are looking at options to shift or rebalance energy levies and obligations (such as the Renewables Obligation, Feed-in-Tariffs and Energy Company Obligation) away from electricity over this decade. This will include looking at options to expand carbon pricing and remove costs from electricity bills. As set out in the Energy Security Strategy we will publish our proposals on how to do so in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers. Financial support is currently available to low income and vulnerable households through the Warm Home Discount, Winter Fuel Payment and Cold Weather Payment. We continue to review additional costs and how best to support fuel poor households during the transition to Net Zero. In addition to these targeted
Source
Committee
Business and Trade Committee
Inquiry
Decarbonising heat in homes
Report
Seventh report - Decarbonising heat in homes
03 Feb 2022
HC 1038
Addressee Bodies
Department for Business and Trade
Timeline
Recommendation age
4.3 yrs
Report published
03 Feb 2022