One million British households now spend more on green energy levies than on fresh vegetables. That is the finding reported by The Times, based on analysis of spending data and energy bills. The figure is a stark measure of how the cost of decarbonisation lands on the wrong shoulders.
As reported by The Times, the poorest tenth of households spend 4.5% of their income on energy bills, compared with 1.8% for the richest tenth. Green levies, the portion of the bill funding renewable subsidies, social schemes and network upgrades, account for about a quarter of that cost. For a typical household using 2,900 kWh of electricity a year, that is roughly £150 to £200 annually.
Who pays, who benefits
The structure of the levy is the problem. Unlike income tax, which rises with ability to pay, green levies are flat charges per kilowatt-hour. A household in a draughty flat with electric heating pays the same rate per unit as a family in a well-insulated detached house with a heat pump. The former uses more electricity and therefore pays more, despite having less disposable income. Ofgem’s own data show that low-income households spend a higher share of their budget on energy, yet receive a smaller share of the benefits from the schemes the levies fund. The Warm Home Discount, for example, covers only a fraction of those eligible.
The Times analysis puts a human number on this: for a million homes, the levy exceeds what they spend on carrots, apples and broccoli. This is an inequality issue and a policy design failure. The government’s own net-zero strategy acknowledges that fuel poverty must not rise, but the current levy system does the opposite.
What it means for your EPC and bills
For homeowners reading this, the immediate implication is simple: the less grid electricity you use, the less levy you pay. Every kilowatt-hour you generate yourself, via solar panels, or avoid through insulation and a heat pump, sidesteps the levy entirely. The Energy Saving Trust estimates that a typical 3.5 kW solar PV system can cut electricity bills by £200 to £300 a year, depending on export and self-consumption. That is roughly the same as the levy itself. A well-insulated home with an air-source heat pump can reduce grid electricity use by 30–40% compared with electric resistive heating, because heat pumps deliver three to four units of heat for each unit of electricity.
The catch is upfront cost. Solar panels average £5,000–£6,000 installed; a heat pump can be £7,000–£13,000 after the Boiler Upgrade Scheme grant of £7,500. The payback period on solar is typically 10–15 years at current prices. For heat pumps, it depends on the existing heating system and insulation levels. But the levy is not going away. In fact, the government has committed to increasing renewable generation, which will keep levy costs on bills for years.
What should change
Campaigners and some MPs have called for moving green levies from electricity to general taxation. That would spread the cost across all taxpayers, not just those who use more electricity. The Resolution Foundation has argued that such a shift would cut the average low-income household’s bill by about £80 a year. The Treasury has resisted, citing the strain on public finances. But the current approach is not fiscally neutral either, it simply hides the cost in bills rather than taxes.
For now, homeowners have two levers: reduce consumption and generate your own. The levy is a fixed cost per unit, so every unit you avoid is a unit you don’t pay for. Check your EPC for insulation and heating recommendations. If you have electric heating, consider a heat pump. If you have a south-facing roof, get solar quotes. The levy will not disappear, but your exposure to it can shrink.
Households on prepayment meters or struggling with bills should check eligibility for the Warm Home Discount (gov.uk/warm-home-discount) and the Energy Company Obligation (ECO4 scheme), which funds insulation and heating upgrades for low-income homes. Applications for ECO4 run until March 2026. The next step is to compare your current electricity tariff, some suppliers offer lower standing charges or time-of-use rates that can reduce levy impact. Use Ofgem’s accredited comparison sites to check.
Frequently Asked Questions
Green levies currently add around £150–£200 per year to a typical household electricity bill, according to Ofgem estimates. This includes costs for renewable subsidies, the Warm Home Discount, and network upgrades. The exact amount depends on your usage and tariff.
No, green levies are applied uniformly across all suppliers as part of the price cap. Switching supplier does not change the levy amount per kWh. However, you can reduce your total levy payment by using less grid electricity, through energy efficiency, solar generation, or a heat pump.
