Budget: 'Reducing energy bill prices is a green win'

The UK government has announced a package of measures to remove an average of £150 of costs from household energy bills across Great Britain from April 2026.

Experts from the University of Reading comment on the announcement. To arrange interviews, contact the University of Reading Press Office 0118 378 5757 or pressoffice@reading.ac.uk. 

Professor Chris Hilson, Director of the Reading Centre for Climate and Justice, said: “Reducing prices on domestic energy bills by scrapping the ECO4 scheme and putting money saved into the equivalent Warm Homes Plan instead is an important social justice and climate win.

“Green levies on bills are regressive because lower-income households spend a greater proportion of their overall income on energy. The ECO4 scheme was funded from bills and was regressive. The Warm Homes Plan – a broadly equivalent and much-needed home energy efficiency programme – is progressive because it’s funded by general taxation.

“It’s also a climate win because we need to reduce the costs of electricity bills relative to gas, to make running heat pumps and charging EVs more financially attractive. A greater percentage of green levies has historically been loaded onto electricity bills than on gas bills. Removing levies from energy bills and funding the programs they support from taxation instead will therefore also be good for decarbonising our economy.”

Professor Jacopo Toritti,  Professor of Energy Economics and Policy, said: The cut in electricity bills is a welcome step for households, and lower electricity prices are vital for supporting the shift to electric heating and electric vehicles. A major driver of this reduction is the government’s decision to take on 75% of the Renewables Obligation costs, which are currently paid by all energy consumers through their bills. Moving these costs into general taxation—broader and more progressive than energy bills—effectively socialises the cost of energy policy across society rather than concentrating it on bill payers. Scrapping the ECO scheme is also the right decision: it had become increasingly inefficient, adding significant costs to everyone’s bills while delivering only limited savings for those it was meant to help.