Vreg: ‘329 euros hidden taxes in family’s electricity bill’
In Belgium, the electricity bill hides a lot of government-imposed costs, for financing green energy, among others. On average, the Flanders government adds 252 euros a year to a family’s electricity bill, totaling 329 euros with the federal state’s ‘costs’ included. For a small company, this will be around 4.000, the Vreg, the Flemish energy regulator, calculated.
Meanwhile, the invoice doesn’t clearly define the costs. They are integrated into the distribution tariffs, the energy price, and extra charges. The additions are used to finance social tariffs, the installation of charging infrastructure, grants for energy-saving measures, and street lighting.
Financing green energy production
But the biggest glutton is the addition used for financing green energy production, like certificates paid to owners of solar panels. The Vreg says that the total cost is too high and not transparent enough.
If the government wants to sensitize people for the energy transition and push them to electric cars for their mobility and heat pumps for heating their houses, the prices of electricity will need to come down.
Earlier studies showed that the energy bill in neighboring countries is a lot lower, which is mainly due to the supplementary costs in Belgium. The energy regulator wants the government to rethink the way it finances the costs in that way.
All the extra costs combined represented 1,4 billion euros last year that went to the Flemish treasure. Because VAT is applied, another 257 million euros go to the federal treasury, a tax-on-tax. Combined, this amounts to a total cost of almost 1,7 billion euros.
Energy regulator advice
Vreg director, Pieterjan Renier, says in an interview with Flemish newspaper De Tijd that the government has to pay the costs for increasing energy efficiency from its budget instead of adding it to the energy bill.
The energy regulator also questions the fact that especially the electricity bill is so heavily impacted, compared to the gas bill. In a quest to lower the CO2 output, electricity will become more critical. Think of heat pumps and electric cars. But the extra costs on electricity make it too expensive, give the wrong signal and stunt the growth of a low-carbon energy system.
The opposition parties don’t spare their criticism. Ecological party Groen says that the electricity bill is a disguised tax bill. It wants the costs to be paid by the government. Left-wing party PVDA wants to lower the energy bill by removing the expenses linked to green energy subsidies. It also wants an audit into the over subsidization of solar panels in commercial projects.
Socialist party SP.a doesn’t plead for the government covering the costs but wants the VAT on energy bills to be lowered. The previous government had upped it from 6% to 21%.
The new Flemish government, which is currently in formation, wants to “see to it that the energy bill stays affordable for families”. However, the different parties at the table, N-VA, CD&V, and Open VLD, don’t have clear proposals on how to do that yet.