Source · Select Committees · Environmental Audit Committee
Recommendation 7
7
Paragraph: 43
We recommend the Government reviews the way ECO is funded, in common with the other...
Recommendation
We recommend the Government reviews the way ECO is funded, in common with the other policy costs that are added to consumer electricity bills rather than gas. Disproportionate use of this regressive funding mechanism is hampering the adoption of low carbon heating options such as heat pumps. We recommend that the Government consults on the balance of levies on electricity versus gas/other fossil fuel heating sources, in order to encourage the uptake of electrifying home heating through the adoption of heat pumps.
Paragraph Reference:
43
Government Response
Acknowledged
HM Government
Acknowledged
The Government is keen to ensure that households and businesses are aware that all energy users are fairly sharing in the benefits and costs of the UK’s transition to Net Zero. on this between Government, consumers and industry by publishing a call for evidence on affordability and fairness. Through this dialogue, we will work with consumers and industry across the sector to identify existing distortions in the system and gain insights into the trade-offs involved in the distribution of energy costs. This will help us to develop proposals on how energy costs can be allocated in a way which is fair and incentivises cost-effective decarbonisation. As set out in the Energy White Paper current price signals present a barrier to uptake of key technologies, such as heat pumps. This includes how the costs of decarbonising energy are apportioned between gas and electricity bills. Government will shortly publish a call for evidence to begin a strategic dialogue between government, consumers and industry on affordability and fairness and set out further details through HMT’s Net Zero Review.