Some green levies will be reduced or shifted into taxation and three new energy-saving schemes will be implemented as part of the policy overhaul.
“The government cannot control the price of energy in the global market, but it can help bill payers by reducing the impact of social and environmental programmes on their bills,” it said.
All of the major suppliers have said they would pass savings down to consumers. Most of the big six have promised a £50-£53 reduction to planned price rises, with Npower the latest to say that it would be taking around £50 off its planned 10.4 per cent price increase. Customers will receive a £12 rebate on bills for the next two years, while the Warm Home Discount will equate to a £135 rebate for vulnerable households. The cost of the Energy Companies Obligation (Eco) energy-efficiency scheme has not been shifted away from bills entirely, but has been reduced and extended from two years to four years, equating to £30-£35 off the average bill in 2014. In addition, energy distribution network companies, which include UK Power Networks and SSE, have agreed to bring costs down voluntarily next year, leading to a further one-off saving around £5.
The three new green schemes are worth £540m over three years and include a £90 investment in improving the energy efficiency of schools, hospitals and other public sector buildings.
Future homebuyers and people moving house can get grants of up to £4,000 to install energy-saving improvements.
Money will also be given to private landlords to increase the energy efficiency of their rental properties.
SAVINGS TO YOUR ENERGY BILL
■ £12 rebate for the next two years
■ £30-35 off the average bill by extending the Eco Scheme
■ £5 one-off reduction from energy distribution network companies