Renewables Obligation
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of moving the cost of the Renewables Obligation levy from household energy bills to general taxation.
Answered by Lucy Rigby
At last year’s Budget, the Chancellor took the decision to fund 75% of the domestic share of the Renewables Obligation through the Exchequer and ended the levy-funded Energy Company Obligation. These decisions took on average £150 of costs off household energy bills and are forecast to reduce inflation by over 0.2 percentage points in 2026/27.
The government keeps all taxes under review and is introducing a new framework to subject levies to enhanced scrutiny and ensure they are affordable, value for money and do not impose unnecessary costs.
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