A new wave of political momentum is building around reforming Britain’s electricity taxes, with lawmakers increasingly recognising that the current system hampers the shift to low carbon home heating. A landmark poll of 111 MPs, conducted by Savanta for clean energy technology company Aira, has revealed that nearly half, 48%, support removing levies from electricity bills to make heat pumps more affordable for households. The findings add fresh impetus to calls from campaigners and industry leaders for a major shake up in how energy costs are structured.
UK households pay some of the highest electricity prices in Europe, with power costing four times more than gas on average. One of the core reasons is the way levies are distributed. Around 80% are loaded onto electricity bills, with only 20% applied to gas. By contrast, many European neighbours spread these charges more evenly, or fund decarbonisation schemes through general taxation. In Germany and the Netherlands, reforms have already shifted levies away from electricity, recognising that clean power should not be more expensive than polluting fossil fuels. Britain’s imbalance means households are penalised for choosing heat pumps, even though the electricity they consume is increasingly generated from renewable sources.
Martyn Fowler, Founder of Elite Renewables, said: “The current levy structure fundamentally distorts the market against heat pumps. We are asking consumers to pay environmental and social levies on electricity that make it roughly four times more expensive than gas per kilowatt hour. A well designed heat pump system can just about overcome this artificial pricing handicap, but the payback for the installation cost remains very long because the electricity prices are so high. Removing or redistributing these levies would create a level playing field where heat pumps could compete on their genuine merits, their 300-400% efficiency rates. It is not subsidising green technology, it is about removing the artificial penalty we have placed on electric heating.”
Central to the United Kingdom’s decarbonisation strategy is the Boiler Upgrade Scheme, which offers households grants of £7,500 to replace old gas or oil boilers with low carbon alternatives. Yet the Savanta poll found worrying gaps in political awareness. 36% of MPs admitted having little or no familiarity with the scheme, while just 8% said they knew it well. Strikingly, awareness is highest among Liberal Democrats, but lowest among Labour MPs in terms of detailed familiarity. Official statistics suggest the scheme has supported tens of thousands of installations since launch, but uptake has consistently lagged behind government targets. Independent evaluations point to low awareness, complex application processes, and the running cost disadvantage of heat pumps as barriers to mass adoption.
Fowler said: “The £7,500 grant is really good, but awareness remains shockingly low. Most homeowners still do not know it exists. We need a proper marketing push, not buried gov.uk pages, but visible campaigns through installers, energy suppliers, and at the point people search for new boilers. The scheme itself works, the communication strategy does not.”
The poll also revealed clear partisan differences. Liberal Democrats, while best informed on the Boiler Upgrade Scheme, were also the most resistant to levy reform, with 58% opposing it. In contrast, opposition was far lower among Labour MPs, at 10%, and Conservatives, at 22%. Despite these splits, there is broad consensus on the role of home efficiency and clean energy in cutting emissions. 71% of MPs cited insulation as the top priority, while nearly half pointed to heat pumps, at 45% , and solar panels, at 49%, as essential household measures.
High electricity costs not only deter households from adopting heat pumps, but also undermine Britain’s industrial competitiveness. Manufacturers face some of the steepest electricity costs in Europe, threatening investment and pushing companies to demand government bailouts. Fowler said: “Look at the Nordic countries. Sweden achieved 60% heat pump penetration with grants of €3,000 to €7,000, but crucially, they got their electricity to gas price ratio right first. Poland is seeing rapid adoption with their €5,000 to €8,000 grants combined with aggressive installer training programmes. The United Kingdom’s grant level is actually competitive, but without fixing the electricity pricing issue, we are essentially offering people £7,500 to potentially increase their running costs. That is not a compelling proposition for most households.”
Matt Isherwood, Aira UK’s Service Operations Director, said: “This report shows us three things, that MPs increasingly support cheaper electricity, that they recognise the role of heat pumps in cutting household emissions, and that more needs to be done to educate both policymakers and the public about the Boiler Upgrade Scheme.” He added that momentum is building for a “big bang” moment in the heat pump sector, one that could finally tip the scales toward mass adoption and lower energy bills for millions of households.
Rebalancing levies would raise questions for the Treasury, which currently uses them to fund renewable subsidies and efficiency programmes. Options under discussion include shifting costs into general taxation, redistributing levies more evenly between gas and electricity, or designing a transitional framework that protects vulnerable households while incentivising clean heat. Analysts at the UK Energy Research Centre and Nesta note that without reform, Britain risks undermining its own net zero strategy. By contrast, lowering electricity costs could accelerate heat pump adoption, reduce reliance on volatile gas imports, and create jobs across the retrofit and clean technology sectors.
For households, the implications are stark. Shifting levies away from electricity could reduce annual bills by hundreds of pounds, narrowing or even reversing the running cost gap between heat pumps and gas boilers. Aira’s report stresses that consumer education must go hand in hand with affordability. Homeowners who have installed heat pumps through the Boiler Upgrade Scheme often report high satisfaction, but many remain unaware of the financial support available or the long term savings from moving to low carbon heating.
Electricity taxation is governed by a patchwork of domestic legislation and European Union derived rules. Reform would likely require new primary legislation, as well as regulatory alignment with Ofgem and HM Treasury. The process would pit government policy priorities against industry lobbying and consumer advocacy, making it a key battleground in the next phase of Britain’s energy transition.
The Savanta poll confirms that reforming electricity taxation is no longer a fringe idea but a mainstream political issue. With growing cross party support, industry pressure, and consumer demand for cheaper and greener energy, the government faces a defining choice. It must decide whether to deliver the moment that could supercharge heat pump adoption and lower energy bills for households, or risk leaving Britain’s homes paying over the odds for clean heat.
Written by: Olivia Needham
