Net zero costs to hit poorest households hardest

Not a Lot of People Know That

The costs of hitting net zero could hit the poorest households hardest, [British] regulator OFGEM has warned, as it launched a consultation into affordability across the energy market. 

OFGEM raised concerns on Monday about how energy bills are being used to shoulder the cost of going green, particularly as the Government ramps up the roll-out of renewables such as wind and solar.

In a statement on Monday, OFGEM said the short-term costs of net zero “could disproportionately hit lower-income consumers” who are unable to invest in new technologies or change their behaviour.

Fears over the cost of net zero falling disproportionately on lower-income households come amid warnings that customer debts have increased by 50% OFGEM said that it remained “very concerned that struggling households have a limited ability to cope with future price shocks”.

It said: “The cost of recovering bad debts, and the high number of consumers who are locked into debt and repayment plans, could have serious consequences for the retail energy sector”.

Financial challenges had led to customers choosing to ration their energy usage, OFGEM said, which has created “harms associated with living in a cold, damp home” and fuelling mental illness.

From https://www.telegraph.co.uk/business/2024/03/11/net-zero-costs-hit-poorest-households-hardest-warns-ofgem/

They might have also added the crippling costs of heat pumps and EVs.

Anybody with half a braincell could have forecast all of this years ago. A much bigger proportion of poorer households’ incomes goes on basics, such as energy, than richer ones, who also benefit from generous subsidies for solar panels and Teslas.

Quite why OFGEM have left it so long to realise this is a mystery.

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