Existing levies and ideas of general tax, zonal pricing or income related bills have all been examined as options to allow investment in infrastructure and aid the transition.

Electricity bills, as highlighted by the latest Climate Change Committee report, are a problem. The high cost of energy is both a direct challenge to industrial competitiveness and creating disenchantment of renewables with the public.

Simon Shaw, regulatory affairs officer at Good Energy has added the company’s concern, and has asked if it is time for the Government to rethink putting green levies on energy bills at all?

A key announcement of the government’s recent Industrial Strategy is the British Competitiveness Scheme, which could cut energy costs by up to £40 per MWh for over 7,000 manufacturing firms, but only from 2027.

The Government suggest this would be achieved by exempting eligible firms from green levies on bills, including the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

For domestic households, social and environmental levies currently sit disproportionately on electricity bills compared to gas, and this is a major barrier to wider electrification. As part of their progress report to Parliament published in June 2025, the independent Climate Change Committee have called for their removal in order to speed up heat pump and electric vehicle adoption.

But Good Energy, and indeed the Climate Change Committee, believe that current proposals do not go far enough, and that the levies should be moved into general taxation. Alternately (see item on Ofgem) Ofgem sees direct income related pricing as a solution (although the net result would be similar).

Shaw notes that the Government is championing heat pumps through various initiatives, but it currently is not doing anything to address their running costs. Moving levies into taxation would bring energy bills down for everyone (but raise tax), whether they are ready to make the switch to cleaner heating or not. Shaw adds that, in his and the company’s pinion, this is a better solution than zonal pricing, also being considered and championed by some other energy suppliers.

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