The government spent £530.3 million between July and September 2026 moving Renewables Obligation costs off household electricity bills and onto the Exchequer. That brings total spending under the scheme to £1.05 billion since it started in April, according to a quarterly report to Parliament published by the Department for Energy Security and Net Zero (DESNZ) on 22 October.
What the scheme does
The Renewables Obligation (RO) is an older support scheme for renewable power, and its cost has been paid through electricity bills. At the Autumn Budget 2025, the government announced that 75% of RO costs would be removed from domestic electricity bills and paid for by the Exchequer instead. The change took effect on 1 April 2026 and runs for three years. It covers England, Scotland and Wales.
The quarterly figures cover only payments under the scheme, not administrative or running costs. The July–September total also includes a correction for April–June, once actual electricity supply volumes replaced the forecasts. A similar correction for July–September will appear in the next report.
How it compares with the Budget estimate
At the Autumn Budget 2025, the Exchequer cost was estimated at:
- £2,580 million in 2026–27;
- £2,100 million in 2027–28;
- £2,195 million in 2028–29.
By our own calculation, the £1.05 billion spent in the first half of 2026–27 is about 41% of the full-year estimate. DESNZ notes that actual costs depend on how much electricity households use and on the RO buy-out price, so the final figure can differ from the estimate.
The bigger picture on bill support
The report also gives final totals for the support schemes from the 2022–23 energy crisis, which have now closed and been reconciled. The Energy Price Guarantee cost £24.1 billion and the Energy Bills Support Scheme £11.9 billion. Together with the business schemes and the new RO scheme, government spending under these arrangements comes to £45.1 billion.
What it means for households
The RO change is one reason domestic electricity bills are lower than they would otherwise be. Households do not receive it as a payment or credit: the costs are simply left out of what domestic customers are charged, and so out of the energy price cap. The cost moves from bill payers to taxpayers for the three years the scheme runs. For this winter’s other bill changes, see our report on the price cap rise and the VAT cut on electricity.