Question

To ask the Secretary of State for Energy and Climate Change, how much was spent on subsidies for renewable energy over the last three years; and what proportion of that amount was paid for by (a) domestic and (b) industrial electricity bills.

The total cost of the two existing schemes to promote renewable electricity – the renewables obligation (RO) and the feed-in tariffs (FIT) scheme – was £1,300m in 2010/11, £1,609m in 2011/12 and £2,498m in 2012/13 (figures not adjusted for inflation).

DECC's methodology for estimating the impact of energy and climate change policies on energy prices and consumer bills assumes that the costs of supporting renewable energy faced by energy suppliers are passed on in full to consumers (domestic and non-domestic). In the absence of firm evidence on differential cost pass-through, it is assumed that costs are spread over UK electricity sales on an equal per-MWh basis.

Given the respective shares of total UK electricity consumption, this implies that households bear approximately one-third of the total UK costs of supporting renewables and that non-domestic consumers (which includes the commercial and public sectors as well as industry) bear the remaining two-thirds. Theprecise method of cost pass-through will vary between energy suppliers depending on their own tariff structure and approach to cost mark-up.