The shortsighted idea of funding green levies like the Feed-in Tariffs through homeowners’ energy bills is now unravelling, says Mark Brinkley
Recently, the newspapers have been full of energy. Winter’s coming and it’s the time of year when the ‘Big Six’ utility companies put up their tariffs.
Prices only ever go up and they always move in tandem, which is guaranteed to make everyone edgy and suspicious. There must be a cartel at work here, surely?
This year, there is another cause for concern — the Miliband factor. The opposition leader thinks he’s hit the jackpot by announcing that, if we are so kind as to elect him in 2015, he will introduce a 20-month price freeze on energy bills. “If you want low prices,” he struts, “don’t switch energy suppliers, switch Prime Ministers.”
All good knock-about stuff, but as a result, the Big Six are now busy adding extra fat to their prices, ensuring they won’t get caught short by such political interference.
Caught off guard by Ed Miliband’s cheeky proposal, David Cameron’s response has been to turn his attention to the green levies that are now part and parcel of our quarterly fuel bills. He wants to ‘roll them back’ but, as with everything else in politics, the devil is in the detail — the devil is currently nowhere to be seen.
Commentators disagree about just how much of our energy bills are made up of these levies, but it seems to be somewhere around the 10 per cent mark and, as a percentage, it’s due to go on rising as it supports a growing number of renewables — not to mention the odd nuke. For politicians of all hues, it’s really a problem of their own making.
Our energy infrastructure is old and creaking, and it relies on burning fossil fuels. Replacing it with low-carbon power sources is a good idea, but the kit is expensive to install (although it costs almost nothing to run). In 30 or 40 years, low-carbon power may work out to be the cheapest option, not just the greenest.
The calculations are not so very different for self-builders wondering how to power their new homes. Do you stick with a gas or oil boiler which is cheap to install now, but will end up costing a small fortune in fuel bills over the coming years? Do you take the plunge and pay extra for a heat pump in the expectation that there will be a payback in, say, 10 years? Or, do you perhaps upgrade your design to PassivHaus standard and claw the added costs back via perpetually low fuel bills?
These dilemmas are altogether too nuanced for the red-top media. They’ve got the green levies in their sights now and they smell blood. Expect ‘rolling back’ to equate to an unravelling over the coming months, as the election draws near and politicians start running scared.
It was always a very bad idea to add these levies to our fuel bills, rather than pay them out of general taxation. Britain’s squeezed middle doesn’t like what’s happening. We’re seeing neighbours being paid for their solar panels and it’s now dawning on us just who’s footing the bill.
What started out as a cuddly idea – homemade renewable energy – may end up driving a wedge between the haves and the have-nots. And all because the politicians took the easy way out in the first place.