Removing social and environmental levies from electricity bills could lead to substantial savings for UK households.
Currently, these levies contribute to making electricity costs in the UK among the highest in Europe.
A new report by Cornwall Insight and the MCS Foundation outlines options to shift these levies into general taxation, estimating potential savings of up to £300 per year for households reliant on electric heating.
For dual fuel households, savings could still amount to between £130 and £200 annually, providing added incentive to switch to low carbon alternatives like heat pumps.
According to Cornwall Insight’s analysis, transitioning levies to general taxation would not impose additional costs on gas boiler users, potentially levelling the playing field between electricity and gas prices.
The report calls for policymakers to consider rebalancing policy costs to support electricity-dependent consumers and to implement targeted measures such as social tariffs to protect vulnerable groups during the energy transition.
David Cowdrey, Acting Chief Executive at the MCS Foundation, said: “The UK’s disproportionately high electricity prices are not only driving fuel poverty, they are also holding the country back from the roll-out of heat pumps that we need to reach net zero.”
