UK Must Cut Electricity Costs to Boost Clean Tech Adoption, Advisors Urge

Strategic Insights -

The UK government needs to take action to reduce the cost of electricity, making it more affordable for households and businesses to switch to clean technologies like heat pumps and electric vehicles, climate advisers have warned. The move to electric cars is beginning to cut transport emissions, but the rollout of heat pumps and EVs is below where it should be, and clear plans are missing for heat pumps. The Climate Change Committee (CCC) has urged the government to address the high cost of electricity, which can deter people from adopting clean tech, and to reflect the aviation industry's climate impacts in the cost of flying.

Key Takeaways:

  • The UK has cut its emissions by more than 50% since 1990, with a 2.5% reduction in greenhouse gases in 2024, marking the 10th consecutive year of sustained reductions.
  • Policies by the previous government, such as subsidies for heat pumps, have helped boost installations by 56% in 2024, while rules to phase out sales of new petrol and diesel vehicles saw electric vehicles make up 19.6% of new car sales last year.
  • The UK government's decision to reinstate the 2030 date for the phaseout of petrol and diesel car sales is a "bold" policy decision.
  • The cost of electricity is a major barrier to the adoption of heat pumps and EVs, with policy costs on electricity bills, such as renewable subsidies and levies, estimated to be around £490 per household per year.
  • The CCC recommends removing policy costs from electricity bills and placing them on gas bills, or into taxation, to make it more affordable for households to switch to clean technologies.
  • By mid-century, households are expected to save around £700 per year on heating bills and another £700 on motoring costs from a shift to electric heating and transport.
  • The manufacturer of the new Jaguar E-Pace electric car comments on the trend not in the provided text.

Statistics:

  • 68%: The UK's international pledge to cut greenhouse gases by 2030, on the way to cutting climate pollution to zero overall (net zero) by 2050.
  • 2030: The target year for the UK to cut greenhouse gases by 68% compared to 1990 levels.
  • 2050: The year by which the UK aims to achieve net-zero carbon emissions.
  • 56%: Increase in heat pump installations in 2024 compared to the previous year.
  • 19.6%: Proportion of new car sales that were electric vehicles in 2024.
  • £490: The estimated annual policy cost per household from electricity bills.
  • £700: The expected annual savings per household on heating bills and motoring costs by mid-century.

Sources:

  • Climate Change Committee (CCC) report to Parliament, 2025.
  • The Guardian: "UK must cut electricity costs to boost clean tech adoption, advisers urge".
  • Labour UK Government announcements, 2024.
  • Department for Business, Energy and Industrial Strategy (BEIS) publications.