Who Really Gets the Hand-Outs? The Truth About Energy Subsidies in Britain

Here’s the thing, while fossil fuel giants pocket £17.5 billion of public money every single year, we’re still told that renewables are the problem. The “real waste of money,” apparently. Climate change deniers, lobbyists and right-wing commentators have spent decades building that lie, a system designed to keep oil companies rich and the rest of us hooked and poorer while our energy prices are linked to the price of gas.

The truth? There are no freebies for renewables. None. What we do have are schemes designed to kick-start the green economy and cut our bills, emissions and reliance on foreign dictators’ fuels. Let’s look at what those schemes are, who built them, and why.

The Renewables Obligation

Back in 2002, when just 3.6% of our electricity came from renewables, the government brought in the Renewables Obligation (RO). It required electricity suppliers, companies like Ecotricity and British Gas, to prove that a growing share of their power came from renewables.

Generators, like wind and solar operators, earned certificates called ROCs for every unit of green electricity they produced. Suppliers handed those to Ofgem to show they’d done their bit. If they hadn’t, they had to pay into a buy-out fund. That fund was then redistributed to the suppliers that had met their targets, rewarding action rather than excuses.

So no, this wasn’t a “hand-out”. In the past five years, Ecotricity alone spent £51.5 million buying ROCs while receiving just £7.2 million for selling them. That’s putting money where our mouth is, helping build Britain’s renewable future.

Feed-in Tariffs

In 2008, the Labour government made a simple, powerful move: help people generate their own green power. From 2010 to 2019, homes and small businesses were paid for the renewable energy they produced and sent to the Grid.

Over 800,000 homes have joined in, providing a total of £12.6 billion in payments made over 20 to 25 years, not from taxes but from suppliers. The more electricity a company supplies, the more it contributes. That’s fair. Compare that with the taxpayer-funded £17.5 billion in fossil fuel subsidies handed out every single year.

As renewable costs fell, the scheme was phased out and replaced by Contracts for Difference, which give renewable generators price stability. When the market price drops below an agreed rate, a small levy tops it up. When it rises above, the generators pay it back.

At Ecotricity, some older sites still receive a small Feed-in income. Those were built in the early days when renewable generation was expensive and risky.

The Climate Change Levy (CCL)

Then there’s the Climate Change Levy, a tax on business energy use for heating, lighting and power. It was introduced by the Labour government in 2001 to encourage efficiency. Renewables were initially exempt, but that changed in 2015.

Even so, there are ways for businesses to cut what they owe, and big ones too. Companies in energy-intensive sectors can sign Climate Change Agreements, which reduce their levy by up to 92% on electricity and 89% on gas.

It’s become a scapegoat in the culture war over net zero, but as E for Energy show, good choices make a real difference. One medium-sized food manufacturer cut its annual levy by £3,800 just by switching to renewable electricity and applying for partial exemption.

That’s how the system should work, rewarding sustainable behaviour and supporting smarter choices.

The Bigger Picture

So while fossil fuel companies are handed billions of pounds in public money and still pollute freely, renewables are painted as subsidy junkies. It’s a twisted narrative, built to protect the old system and the people who profit from it.

If we’re serious about building a green economy, with lower bills, cleaner air and real energy independence, we have to break the link between truth and fossil fuel spin. The future’s already here, waiting for politicians brave enough to back it… :)