July 08, 2013

While it may seem like a contradiction in terms that a free energy resource could end up costing consumers, recent research has suggested that this could be the case in years to come.

Forecasts from the Taxpayers’ Alliance suggest that green taxes and charges for hydropower and wind projects could make up £620 of the average UK gas and electricity bill by 2020.

Currently these taxes and charges make up £191 of an annual average gas and electricity bill of £1,420 and the expected increase could push combined energy bills up to as much as £1,900 by the end of the decade.

Commenting on the figures, Matthew Sinclair, chief executive of the Taxpayers’ Alliance, argued that this increase could put even more strain on household finances.

"People who are already finding it hard to pay their bills will not be able to cope with the big increases in prices needed to meet draconian targets for the energy sector. We cannot allow more families to suffer needlessly and more jobs to be driven overseas thanks to high prices here in Britain. It is time to stop the energy swindle,” he said.

The Alliance has set up the website to enable consumers to calculate how much of their energy costs are made of taxes.

The case against

The Department for Energy and Climate Change (DECC) has argued that escalating energy costs are down to global gas prices rather than green subsidies. They argue that increases in global gas prices have made up 60% of the increase in energy bills between 2010 and 2012.

The DECC went on to add that “investing in home grown alternatives is the only sure fire way of insulating our economy and bill payers from this volatility.”

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