Overview
- The government will not renew the Energy Company Obligation when it expires in March 2026 and will move 75% of legacy renewables obligation costs off electricity bills and into general taxation.
- Budget documents point to average savings of about £88 from the renewables shift and £59 from ending ECO, with a small VAT effect bringing the total to roughly £150 per household.
- Martin Lewis said officials indicated the change equates to about 3.3p/kWh off electricity and 0.3p/kWh off gas before VAT from April 1, 2026.
- Ministers say suppliers are expected to pass the reduction on in full, though the treatment of customers on fixed tariffs has not yet been finalised.
- Campaign groups welcomed cutting levies from electricity but warned that axing ECO will reduce planned retrofit funding, risk jobs and leave more low‑income households without insulation support, despite a new £1.5bn Warm Homes pledge.