Heat pumps, renewables and home-operated energy infrastructure have been favoured for funding in the budget, leaving some associated companies happy in its wake.
Ana Musat, RenewableUK’s Executive Director of Policy, said: “The Chancellor is right to focus on measures to drive down the cost of energy for hard-pressed billpayers. He highlighted the fact that clean power is the key to achieving this – new wind and solar projects are our cheapest power sources.
“Renewables are already lowering bills by driving the most expensive gas generators off the system, so they meet the affordability test he set out in his Budget speech. Wind farms cut electricity prices by almost a third in 2025, and wind and solar have saved consumers £5.9 billion so far this year by avoiding the need to import more gas.
“We agree that Contracts for Difference offer the best guarantee of clean power at stable and predictable low prices, protecting consumers from the volatility of international gas markets which we can’t control. This system, which has been copied all over the world, enables us build new generation as cheaply as possible, reducing bills by moving away from costly fossil fuels.”
However, others don’t agree that enough has been done.
Charlotte Lee, Heat Pump Association UK Chief Executive, said: “Today’s Budget represents yet another injection of uncertainty into the deployment of heat pumps, further eroding confidence across the sector. The VAT hike on heat pumps in the face of the second global fossil fuel crisis in less than five years is reckless and undermines this Budget’s emphasis on national security.
“The Government is right to protect consumers, but the £2.6 billion being spent on household support this winter is a sticking plaster. For long-term resilience and lower bills, the Government must prioritise implementing a new low-income support scheme as part of its devolution strategy as soon as possible.”
Meanwhile, British Gas welcome the changes – but don’t believe that the public know how to grasp the help available to them, in a wider communication issue from the government.
Maff Potts, CEO of British Gas Energy Trust, said: “This is welcome help at a time when millions of households are worried about what rising energy costs will mean for them this winter. Putting money directly back into people’s pockets, alongside action on standing charges and energy debt, is a positive step.
“Our research shows us that most people in severe hardship don’t know what help is available or assume they are not eligible. It doesn’t have to be this way. Please help us in letting them know support is out there, tell them about our work and the work of others in the energy advice and charitable grant spaces – pass it on!”
Long-term measures have also been heavily discussed, with the chancellor promising them as a means of energy security. However, this seems to have been lost in translation, as Mr Healey did not in fact produce what the industry has been asking for – long term investability.
Olivia Powis, Chief Executive of the Carbon Capture and Storage Association (CCSA), said: “In today’s budget, we welcome the Government’s continued commitment to deploy mature projects within HyNet and the East Coast Cluster, alongside maintained grant funding for Viking CCS.
“We understand the need for Government to prioritise defence spending; however, the stated direction of travel for future CCUS funding, moving towards equity and loans, and the cuts seen to both Hydrogen and CCUS support do increase the level of uncertainty for both mature and future projects.
Our security also depends on retaining foundational industries, including cement and chemicals, for which CCUS is essential. Loans and equity investments – including the recently announced Energy Wealth Fund – could offer a route forward, but industry urgently needs clarity on how these mechanisms will work, when funding will be available and how they will enable final investment decisions this Parliament. We will work constructively with the Government to establish a clear, investable framework that builds on existing progress and supports its reindustrialisation ambitions.”
Also speaking about confidence in carbon capture, alongside wider energy security and investor confidence, Dhara Vyas, Chief Executive of Energy UK, said:
Dhara Vyas, Chief Executive of Energy UK, said: “The Chancellor was right to focus on the importance of cutting energy bills in the short term and long term – they cause ever increasing difficulties to households and businesses, and act as a drag on growth across the economy and in every postcode in the country.
“We of course recognise the fiscal challenges facing the Government, but that doesn’t alter the fact that cuts to previously committed funding like the Warm Homes Plan or for carbon capture damage investor confidence, jeopardise jobs and small businesses in the supply chain, and harm our ability to better withstand future price crises. The Chancellor emphasised the need for long-term measures and must be careful that he is not undermining that future with decisions made today.”
Ultimately, the words on everyone’s tongue are centred around confidence in investment in energy – or more aptly, the lack of it.
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