Right wing think tank Policy Exchange claims every household in Britain will end up paying an extra £400 a year by 2020 – the equivalent to 2.5p on VAT.

However, the report The full cost to households of renewable energy policies ‘fails’ to cover the economic benefits of a high level of investment in renewable energy, according to its critics.

It claims £400 is not the total cost of climate policy but the additional cost imposed because the Government subsidises ‘expensive renewables’ such as offshore wind rather than cheaper ways of reducing carbon emissions.

It claims businesses pay most of the costs of climate and renewable policies through high energy prices, however, most of these costs are ultimately passed on to households.

Policy Exchange head of environment and energy, Simon Less, said: “Unnecessarily expensive policies which put additional strain on squeezed household budgets will not help win the sustained public support needed to address climate change.

“While renewable energy will have a key role to play in emissions reduction, we need an informed debate about the value for money of existing renewable energy subsidies and about how best to use the money available for climate action.”

Green energy trade association, RenewableUK, said the report contains ‘misunderstandings and confusions’.

RenewableUK’s director of external affairs, Jennifer Webber, said: “Policy Exchange is wrong to be worried about offshore wind.

“The real danger to household bills over the next ten years comes from the same kind of uncertainty about the cost of imported fossil fuels we’ve seen over the previous ten – a decade in which gas prices more than doubled.

“Britain’s fantastic wind power resource – the best in Europe – can help reduce that uncertainty.”

She added the expansion of offshore wind could bring more than 70,000 jobs and that Policy Exchange should go back to the ‘drawing board’.

Luke Walsh

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