Inexperienced levy prices don’t make up 25% of power payments

“We have to do away with the inexperienced levies, which might be 25% of our power payments.”

Robert Halfon MP, 12 Might 2022.

Throughout an look on Radio 4’s At this time programme on 12 Might, Conservative MP Robert Halfon wrongly claimed that inexperienced levies account for 25% of power payments whereas arguing that they need to be scrapped to assist mitigate the impression of modifications to the price of dwelling.

Mr Halfon repeated this declare in a since corrected op-ed for The Solar, and it has additionally been made by others, together with UKIP.

The determine solely refers to electrical energy payments, not power payments typically, and consists of some cash spent on social schemes, not simply environmental schemes. 

What are inexperienced levies?

The time period “inexperienced levies” is usually used to seek advice from “environmental and social obligation prices”, that are contributions paid by shoppers through bigger power suppliers in direction of varied power insurance policies. UKIP’s submit claims that these prices are used to “subsidise rich firms to construct wind and photo voltaic farms.”

Whereas it’s true that a few of the cash from these prices goes in direction of large-scale renewable power initiatives, they’re additionally used to fund a variety of different environmental insurance policies, together with enhancements to the power effectivity of houses and enterprise and Feed in Tariffs paid to households for surplus power generated from renewable sources (like photo voltaic panels). 

So the cash isn’t simply spent on constructing wind and photo voltaic farms as UKIP claimed.

The prices additionally pay for the Heat Residence Low cost, a social coverage which gives rebates on power payments to low-income households. So whereas inexperienced levies fall below the environmental and social obligation prices banner, they don’t make up the whole thing of the prices as Mr Halfon prompt.

Inexperienced levies don’t account for 1 / 4 of the price of power payments

In line with the regulator Ofgem, a mean direct debit power buyer below the default worth cap introduced on 1 April would pay £1,971 per 12 months, of which £153 could be environmental and social obligation prices. 

Based mostly on these figures, the prices account for round 7.8% of the invoice—far lower than the 25% determine claimed by UKIP and by Mr Halfon on the At this time programme. This share is barely decrease for individuals who pay for his or her power utilizing customary credit score or prepayment meters, as these payments are topic to a better worth cap.

The proportion of power prices accounted for by environmental and social obligation prices has truly decreased over the previous 12 months, from 12% in winter 2021/22 and 15% in summer time 2021. It is because whereas the entire worth cap has elevated, environmental and obligation prices have truly fallen barely from £172 in summer time 2021.

Mr Halfon was doubtless referencing figures associated to electrical energy payments

After going through criticism on social media for his declare, Mr Halfon clarified that inexperienced levies comprised 25% of electrical energy payments. That is right in accordance with a 2021 Ofgem breakdown of electrical energy invoice prices which confirmed that environmental and social obligation prices accounted for 25% of a mean electrical energy invoice. 

Nevertheless, as we’ve proven, claiming that this 25% was solely for inexperienced levies on power payments, as he stated on the radio, remains to be inaccurate. 

Mr Halfon repeated the wrong declare in his column revealed in The Solar, which has since been corrected to take away the determine.

Full Reality has requested Ofgem if it has any extra up-to-date info out there on environmental and social obligation prices as a share of electrical energy payments to replicate the 2 power worth cap will increase since that information was launched.

Official portrait of Robert Halfon MP, Attribution 3.0 Unported (CC BY 3.0) 

We deserve higher than dangerous info.

After we revealed this truth test, we contacted Robert Halfon to request a correction relating to this declare.

He’s didn’t reply.

It’s not ok.

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