A Right to the Sun: How a New Solar Bond Can Cut Bills and Build Energy Security

Summary

The UK’s household gas and electricity prices have doubled since 2010 and were briefly 300 per cent higher during the 2022 energy crisis (Figure 1).^[1] During the same period, the share of renewable electricity has risen from 6.9 per cent to almost 50 per cent in 2024.^[2] As numerous studies have now emphasised, the outsized role of gas-powered electricity in setting the wholesale price across the board — starkly disproportionate to its much smaller share of power generation — sharpened the spike in household bills during the natural gas crisis of 2022-23, translating the lower cost of clean power into windfall profits instead of lower bills.^[3] However, under the current policy and wholesale market framework, the continued rollout of utility-scale low-cost clean energy will only reduce wholesale electricity to the extent that they push gas out of the merit order. As a result, the Government’s Clean Power 2030 plans to fully decarbonise the grid are unlikely to reduce household bills in the near term,^[4] with the high costs of grid upgrades and other policies further blunting the effect of the growing share of renewable electricity.

[.fig][.fig-title]Figure 1: Electricity and Gas Prices in 2023 Were Double Their 2015 Levels, Which Were Double Their 2005 Levels[.fig-title][.fig-subtitle]Annual UK gas and electricity price levels, 1988-2024, indexed to 2015=100[.fig-subtitle][.fig]

[.notes]Source: “Consumer price inflation, UK: November 2025”, ONS.[.notes]

These factors now present an existential threat to the legitimacy of Labour’s “Clean Power” target and by extension the wider net zero agenda. The Reform UK party, positioning itself as the vanguard of a growing anti-net zero movement, is weaponising claims that decarbonisation will worsen the cost of living crisis to dismantle the UK’s clean energy transition.

In this paper, we argue that the government must tackle this issue head on, offering citizens a stake in the energy transition, to directly lower their bills in the near term by increasingly bypassing the unreformed market where cost reductions in generation still rarely translate into wholesale unit rate reductions. Our proposed solution — a mass rollout of rooftop solar, via long-term, low-interest loans, backed by a twenty-five-year green sovereign bond — could bring the transition home to households squeezed by increasing living costs, create jobs in local supply chains and reduce household bills by at least £250/year — without breaking the Treasury’s fiscal rules.