Green taxes which push up energy bills are to be slashed by the government, MailOnline has learned.A ‘big reset’ of the support given to the renewable industry is expected to be announced within weeks, including cuts to funding for the solar industry.
Cabinet insiders say the view on tackling subsidies has ‘hardened’ over fears recent price cuts announced by power firms will be wiped out by rising environmental taxes.
Chancellor George Osborne has torn up the Tory-Lib Dem Coalition government’s commitment to increasing the proportion of revenue from green taxes
The Tories have already announced that taxpayer subsidies for wind farms are to be axed a year early.
But the government is expected to go much further and review all support given to green energy which is funded by levies on bills worth £4.3billion-a-year.
The solar industry in particular is braced for an announcement on cuts to its support.
The Cabinet discussed this week election promises to focus on only ‘backing good-value green energy’ with a promise to ‘cut emissions as cost-effectively as possible’.
There will be a major expansion of nuclear and gas, but solar farms and plans for a tidal lagoon to generate power off the cost of Swansea could be ditched.
Energy Secretary Amber Rudd has warned the renewables industry and campaigners that support for the environment has to be weighed against the impact on families’ energy bills
British Gas this week announced its second price cut of the year, which together will reduce the average annual bill by around £72.
But ministers have been told that state funding for green energy and a carbon tax on coal and gas will together add £175 to the average household bill by 2030.
‘We need to deal with those extra costs at the top of the electricity bill,’ one Cabinet source said.
‘A struggling pensioner has to pay it when she doesn’t have the benefit of putting solar panels or a wind turbine on her roof.
‘There is a hardening view in the Cabinet that we’ve got to deal with green subsidies.’
Energy Secretary Amber Rudd has warned the renewables industry and campaigners that support for the environment has to be weighed against the impact on families’ energy bills.
‘All that support costs money,’ she said last month. ‘We cannot ignore the fact that, obviously, people want subsidies if they are on the receiving end of subsidies, but we have to ensure that we get the good measure of it.
‘We are trying to reduce emissions and give a variety of renewable energy, and to ensure that individuals who look at their bills when they get home see that they continue to come down.’ She has ruled out backing large-scale solar farms and favours small community energy projects on people’s homes and on other buildings.
There are calls in the Tory party to go further and cut or abolish subsidies given to offshore wind farms as well.
A spokesman for the Department for Energy and Climate Change said: ‘Reducing energy bills for hard working British families and businesses is this government’s priority.
‘We’ve already announced reforms to remove subsidies for onshore wind, and that work to make sure bill payers are getting the best possible deal is going to continue.’
The plan is the latest stage of Conservative plans to cut the costs of going green made possible by the loss of the Lib Dems from the government.
George Osborne has also torn up the Coalition government’s commitment to increasing the proportion of revenue from green taxes.