The new Prime Minister, Liz Truss, has announced her plans to deal with sky-rocketing energy bills as we head into the winter season.
The long-awaited package sets out measures to cap domestic energy bills, support businesses and vulnerable sectors and put into place long-term plans to strengthen domestic energy production and secure future supplies at affordable rates.
Here are the main points:
- Domestic tariffs capped at £2,500 for 2 years
Under the new Energy Price Guarantee, typical household energy bills will be capped at £2,500 for the next two years, protecting consumers while the government gets the energy sector back on track.
- £400 payment remains
All households in the UK will be paid £66 per month through their electricity bills from October 2022.
- ‘Equivalent’ support for businesses
The PM promised businesses, charities and public sector organisations an “equivalent guarantee” for six months, with further support for hospitality, local pubs and other vulnerable sectors.
A review by the Business Secretary, Jacob Rees-Mogg, will set out where funding will be targeted within the next three months but until then, businesses are advised to consider energy efficiency improvements and small-scale energy generation.
Enquiries for Solar PV are already at an all-time high and this increasing demand from domestic and commercial customers will strengthen the sector further.
- No ‘windfall tax’
We know that a small part of the funding will be delivered through the temporary suspension of green levies, but the wider details are yet to be revealed. The new Chancellor, Kwasi Kwarteng, will set out a financial breakdown later this month, however the PM specifically noted that there would be no windfall tax on energy companies.
- Long-term measures – renewables, nuclear and fracking
Controversially, the PM announced she would reverse the ban on fracking “where there is local support”. The practice was stopped in 2019 due to concerns about tremors. The PM said drawing on huge reserves of shale would get gas flowing in as little as six months’ time.
Great British Nuclear – a project that was announced in the Energy Security Strategy earlier this year – will launch later this month, with the PM backing the development of small modular reactors to deliver up to a quarter of our electricity through nuclear by 2050.
The PM announced new fixed price Contracts for Difference (CfD) aimed at harnessing low-cost renewable generation which will make a real difference to the cost-of-living crisis.
- UK will be a net energy exporter by 2040
This target will help support deployment of all clean and renewable energy technologies, particularly solar, at both consumer and grid level, while driving the acceleration of new sources of clean energy.
In a statement from Solar Energy UK, Chief Executive Chris Hewett said: “The economics of rooftop solar have never been better – and we have the evidence to prove it. But while they drive down the cost of energy for homes and businesses, the UK is in dire need of new solar farms to provide cheap, green, secure power for all of us.”
- Net zero 2050 progress review
At the end of the year, we can expect a review chaired by Chris Skidmore MP to ensure we are approaching our net zero 2050 target in the most economically efficient way. This will be interesting, considering the rapidly changing landscape since the legally binding commitment was made in 2019.
Train for the future
The Energy Price Guarantee is certainly a welcome intervention for domestic customers, who were facing a price cap of £3,549 next month and potentially up to £7,700 by April 2023. However, bills remain high, set at almost double what they were this time last year.
Solar PV systems, including battery storage, are one of the best ways end-users can mitigate against rising monthly energy costs and demand has soared this summer, thanks to the hot weather. Waiting times for solar panel installations have almost doubled as many installation companies struggle to source products or provide skilled installers to take on the sheer volume of work.
It’s clear that solar PV and battery storage installation are valuable skills for the future. If you want to find out more about getting trained up, visit our solar photovoltaics installer course and battery storage training course pages for further information.