Policy costs are government levies collected to fund environmental and social programs. They currently make up 17% of a typical electricity bill and 7% of a gas bill (18% and 8% from January 2026). They fall into two categories:

1. Environmental levies cover investments in renewable energy. They currently fund three schemes:
   1. The Renewables Obligation covers previous investments made by electricity companies in renewable electricity generation.
   2. The Feed-in Tariff scheme covers incentives paid to households that installed solar panels and other green technology early on.
   3. The Green Gas Levy funds the production of biomethane as a “green” component of the gas supply.
2. Social levies fund government schemes for fuel-poor households. 
   1. The Energy Company Obligation scheme instals energy efficiency improvements for low-income households.
   2. Warm Homes Discount provides low-income households with annual discounts on their energy bill. 
   3. Assistance for Areas with High Electricity Distribution Costs is a small levy subsidising network costs in remote parts of northern Scotland.