October 18, 2021

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Households with gas to pay more under proposal to switch green energy surcharge to electricity bills

The heating of homes and workplaces, for which gas is heavily relied upon, accounts for almost one-fifth of the UK’s carbon emissions. 

Gas is currently taxed at a lower rate than electricity despite being a pollutant, while electricity can be generated through renewable sources.

The Government has set itself the long-term goal of eliminating all net carbon emissions by 2050 and green surcharges are set to play a crucial role in this. The surcharges currently add £159 to each household’s electricity bill on average.

The Department of Business, Energy and Industrial Strategy said they wanted to encourage people to take up technologies such as heat pumps and electric vehicles, while insisting that “affordability” for consumers and taxpayers would be at the heart of their approach.

The sale of new gas boilers is set to be banned by 2035. Heat pumps, an eco-friendly electric alternative to gas boilers which work like a refrigerator in reverse, currently have much higher upfront installation costs than gas boilers.

Air-source heat pumps currently cost around £10,000, though suppliers are expected to cut these costs over the coming years.

A survey by RSK Group found that almost 80 per cent of homeowners would only install a heat pump system if they received adequate financial support from the Government to meet the costs of putting in the technology.

Earlier this month, a report from the Institute for Public Policy Research warned that only six per cent of the heat pumps needed to reach the UK’s net zero target of 2050 are currently being installed.

A spokesman for the Department for Business, Energy and Industrial Strategy said: “Over the next 15 years, we will help households to gradually transition away from fossil fuel boilers as people replace their appliances with lower carbon, more efficient alternatives like heat pumps, with £1.3bn already committed to support upgrades to home energy efficiency.

“Alongside leading manufacturers and suppliers of heating systems, we are confident that the upfront costs of low-carbon heating systems, such as heat pumps, will fall in the upcoming years, and we will look to help the market drive down these costs.”

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