What is the Climate Change Levy (CCL)? The Climate Change Levy (CCL) is a UK government tax introduced in 2001 to encourage businesses and the public sector to improve energy efficiency and reduce carbon emissions. Unlike RO , CfDs and FiTs , which fund renewable generation, CCL is a direct tax on energy consumption. CCL applies to the supply of electricity, gas and certain solid fuels used for non-domestic purposes. It is charged per unit of energy consumed, regardless of when or how that energy is used. The levy is administered by HMRC and is designed to create a price signal that incentivises lower energy use and investment in efficiency measures. Who pays the CCL? CCL is payable by non-domestic energy users, including businesses, charities and public sector organisations. Domestic consumers are exempt. Energy suppliers are responsible for collecting the levy and passing it on to HMRC, but the full cost is passed through to customers via energy bills, usually as a clearly identifiable line item. Some organisations may qualify for CCL relief or exemption, most notably: Businesses with a valid Climate Change Agreement (CCA) Certain energy-intensive processes Supplies generated from qualifying renewable sources How much is the CCL (and when are rates revised)? CCL rates are set by the government and are typically revised annually, usually taking effect from 1 April each year. Rates are published by HMRC in advance to allow suppliers to update billing. For both gas and electricity, CCL is charged on a pence per kilowatt hour (p/kWh) basis. The current CCL rates are 0.775p/kWh, set to rise to 0.801p/kWh from April 1st 2026, and then to 0.827p/kWh from April 1st 2027. Unlike RO or CfDs : CCL is not forecast or reconciled There is no recycling or levy adjustment The charge is fixed and unavoidable unless a formal exemption applies Why CCL matters for businesses Because CCL is a straight consumption tax, it directly rewards reduced energy use. Efficiency improvements, on-site generation, and CCA participation can all reduce CCL costs. This makes CCL one of the few policy costs that businesses can actively manage rather than simply absorb. If you would like to ensure your CCL charges have been invoiced correctly, contact us today and we can review your recent invoices to make sure you aren't paying more than necessary.

What is the Feed-in Tariff (FiT)? The Feed-in Tariff (FiT) scheme was introduced in 2010 to support small-scale, low-carbon electricity generation. Unlike the Renewables Obligation -- which targeted large generators -- FiT was designed to encourage households, communities and small businesses to install technologies such as solar PV, wind, and hydro. Under the scheme, eligible generators receive a fixed payment for each unit of electricity they generate, regardless of whether it is consumed on-site or exported to the grid. In addition, an export tariff is paid for electricity exported to the network. The FiT scheme closed to new applicants in March 2019, but existing installations continue to receive payments for the duration of their support term (typically 20–25 years), meaning FiT costs will remain on electricity bills into the 2040s. How does the FiT scheme work in practice? FiT payments are made up of two components: Generation tariff – a fixed p/kWh payment for every unit of electricity generated by an accredited installation. Export tariff – a separate payment for electricity exported to the grid. Tariff levels were set at the point of accreditation and are linked to inflation for the lifetime of the installation. Payments are made by licensed electricity suppliers, who are required to participate in the scheme. Suppliers recover the cost of FiT payments through the FiT levelisation process, which redistributes costs across all suppliers based on market share. These costs are then passed through to electricity consumers and will appear on invoices as a Feed in Tariff (or FiT) charge. Who pays the Feed in Tariff? The cost of FiT is ultimately paid by electricity consumers, including business users, via pass-through charges on electricity bills. Both the British Industrial Competitive Scheme and The British Industry Supercharge r offer the ability for eligible businesses to receive exemptions from paying this charge. For most businesses, FiT appears as a non-commodity policy charge, separate from energy costs and network charges. How much is the FiT? FiT costs are calculated annually through the levelisation process, which reconciles actual payments made to generators against forecast collections. In p/kWh terms, FiT charges are typically around 8.5 p/kWh for business electricity customers, although this varies slightly year to year depending on inflation, total accredited capacity and supplier market shares. Final FiT levelisation amounts are confirmed after the end of each scheme year, with any discrepancy corrected in future charges. While FiT costs are smaller than RO charges , it remains a persistent and unavoidable component of UK electricity policy costs. If you would like to ensure your FiT charges have been invoiced correctly, contact us today and we can review your recent invoices to make sure you aren't paying more than necessary.