Wind farms to add £70 to energy bills as households pay for Net Zero subsidies
British households could face an extra £70 a year on their energy bills by the end of the decade due to subsidies supporting new wind farms, according to fresh analysis from the think-tank Onward.
The research estimates support payments for renewable projects under the Contracts for Difference (CfD) scheme could add around £6billion to consumer energy costs by 2030.
At present, these subsidies contribute roughly £30 to the average annual electricity bill, but Onward warns this could more than double within four years as new developments begin generating power and receiving payments.
The findings place renewed scrutiny on the Government’s drive to expand low‑carbon electricity generation as part of its wider Net Zero strategy.
Renewable support payments will increase costs for households
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According to the report, environmental charges now make up a significant share of household electricity bills, with green levies, carbon taxes and VAT accounting for around 30 per cent — equivalent to about £285 a year.
By contrast, the underlying cost of electricity represents just 34 per cent of what consumers pay.
On an average annual bill of £963, the electricity itself amounts to £324, while transmission and network charges add another £200.
The remaining £300 comes from a patchwork of environmental levies and taxes, nine of which currently appear on bills. CfD support payments are identified as one of the fastest‑growing components.
Britain’s electricity prices rank among the highest in Europe, the report notes, with industrial and commercial rates among the most expensive globally.
Domestic tariffs are also comparatively high, adding pressure during the cost-of-living crisis. Household energy debt has risen sharply since 2021, reaching £5.5billion.
Onward argues that rising electricity prices have contributed to falling power consumption across the UK.
“Britain has been left with among the highest industrial electricity costs in the world,” the report said, adding that both consumers and businesses have cut usage significantly.
The UK has reduced energy use per person and overall electricity production more sharply than any other G20 country, with per‑capita consumption now lower than in nations such as Iran, Libya, Bulgaria and Belarus.
Sir Simon Clarke said Ed Miliband was asleep at the wheel
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Sir Simon Clarke, Onward’s director and a former Conservative MP, said the findings highlight concerns about the pace of current energy policy.
“Our report sets out how Britain’s homes and businesses are paying the price of the Government’s policy running so far ahead of reality,” he said. “Sadly, Ed Miliband is seemingly the last person to recognise how serious the crunch risks becoming.”
The Department for Energy Security and Net Zero said ministers are taking action to reduce bills.
A spokesman said some energy policy costs have been shifted from bills to general taxation. “We are acting to bring bills down now and for the long term,” they said.
“We’ve taken an average of £150 off energy bills from April, and our mission for clean power by 2030 will get us off the rollercoaster of fossil fuel prices.”
