The recent UK government decision to freeze the carbon price floor has been welcomed with open arms by householders that have said they will benefit from average savings on their energy bills of £15 a year. So what is the carbon price floor and why does it have such an impact on the industry and ultimately our energy bills?
The carbon floor price is a tax that companies and energy providers have to pay per tonne of CO2 for fuels used for generating power. This cost will then be passed on to us within our energy bills.
When it was introduced in 2012, companies had to pay £16 per tonne of CO2 emitted. The recent government decision will freeze the carbon floor price at £18 per tonne of CO2 between 2015 and 2020. The original plan of the government was to increase the carbon floor price to £30 by 2020. These savings will soon be passed on to households which is good news.
To save more money in the long run, you could invest the money you saved on buying energy saving products such as LED bulbs or energy efficient appliances. Even more money can be saved by switch energy providers, try Switchwise UK to save you even more on your next energy bill, Just enter your postcode on our homepage and start comparing.