The move from fossil fuels to green energy could cost British households £600 a year by 2020, according to an industry analyst.
A new report by think tank Civitas claims the total price tag of pursuing renewables could rise above £16 billion a year when VAT is included.
Dr John Constable (pictured), Director of the Renewable Energy Foundation, who conducted the research said: “The fact is that renewable energy is still far from competitive with fossil fuels and nowhere near as economically productive. Consequently, shifting to current renewables for the bulk of our energy would result in a reversal of the long-run economic trend since the industrial revolution.
“More people would be working for lower wages in the energy sector, energy costs would rise, the economy would stagnate and there would be a significant decline in the standard of living. The green energy industries are not sufficiently productive to be self-sustaining; that is to say they are not economically sustainable without continued support from the fossil-fuelled economy.”
He added subsidies are holding back innovation in the green energy industry by removing the incentive to design devices that would be necessary to make renewables sustainable in the long term.
Mr Constable said: “Subsidies, those transfers of wealth from the fossil-fuelled economy, are providing remarkable rates of return for short-term investors but when these transfers cease, as they will when consumers tell politicians that the prospective or actual reductions in standards of living are unacceptable, the current green growth will evaporate like dew before the rising sun.
“A long term future for the green economy is only possible if the green energy sector is as economically productive as the fossil-fuelled one but the renewables of today simply are not so. A green economy as prosperous as today’s fossil-fuelled economy is a theoretical possibility, but we can’t be more definite. However, we can be certain that our current policies are taking us further away from that possibility, not closer to it.”
Under the EU’s 2009 renewables directive, Britain needs to generate 15% of its energy from renewable sources 2020.