Could Wealth-Based Energy Bills Protect Low-Income Households?

Ofgem’s Standing Charge Review and What It Means for the Future of Green Skills

As the UK transitions to a cleaner energy system, the way we fund that transition is under growing scrutiny. Ofgem, the UK’s energy regulator, has launched a landmark review into standing charges, the fixed daily fees all households pay regardless of how much energy they use.

Currently, the average household pays over £330 per year in standing charges, which cover essential infrastructure like grid maintenance and the rollout of renewable energy. But these flat-rate fees are now being criticised for hitting the lowest-income households the hardest.

Could the answer lie in wealth-based billing? And what kind of green skills will we need to ensure this transition is fair and functional?

The Problem With Standing Charges

Standing charges are designed to fund public energy infrastructure, including the smart grid and clean energy upgrades. But unlike unit-based billing (which charges per kilowatt hour used), standing charges don’t change based on how much energy you consume, or what you can afford.

This means:

• Low-income households using less energy still pay a high share of fixed costs.
• Vulnerable people, like the elderly or those with health needs face disproportionate costs.
• Renters and people in inefficient homes (often through no fault of their own) struggle the most.

Jonathan Brearley, CEO of Ofgem, says this system may no longer be fair or fit for purpose.

A More Progressive System?

Ofgem’s review is expected to explore a range of models, including more progressive billing systems that could reduce costs for lower-income households and rebalance them for higher users or wealthier households.

This isn’t just about social justice, it’s about public confidence. If consumers believe the clean energy transition is unaffordable or unfair, support for net-zero policies could erode.

The challenge? Energy companies don’t have access to household income data, meaning any reform would require significant policy coordination and new systems.

What This Means for Green Skills

If standing charges are reformed, we won’t just need new billing models, we’ll need a skilled workforce to implement, support, and communicate the changes.

Here’s where green skills come in:

1. Energy Policy & Regulation

• Roles in public sector and energy companies to develop, analyse, and implement fair pricing systems.
• Demand for professionals who understand regulatory frameworks, tariff modelling, and social equity in energy.

2. Community Energy Engagement

• Community coordinators and energy advisors who can explain changes and help vulnerable households adapt.
• Skills in public engagement, energy literacy, and behavioural change.

3. Technical & Infrastructure Roles

• As fixed charges often fund grid improvements, there’s continued demand for:
  • Smart grid engineers
  • Solar and storage installers
  • Energy system integrators

4. Ethical Procurement & Planning

• As fairness becomes a key pillar of clean energy policy, roles in supply chain auditing, ethical planning, and inclusive infrastructure design will expand.

Looking Ahead: Why Equity Matters in a Net-Zero Future

As Ofgem rethinks how we pay for our energy system, standing charges and billing structures could look very different in the near future.

Whether or not these reforms are adopted, the conversation signals a shift toward fairness, transparency, and a growing recognition of the social side of energy policy.

Understanding how energy is used, wasted, or saved in our homes and buildings will be key to making the transition work for everyone, not just those who can afford to upgrade.

At Essential Green Skills, we’ll continue sharing updates on the policies and industry changes shaping the UK’s path to a low-carbon future.