UK Non-Commodity Charge · Auto-generated
Renewables Obligation
Current rates, who sets them, and where they are forecast to go.
What Renewables Obligationis, who sets the rate, what the revenue funds, and where it's heading. Sourced daily from the Purely Energy non-commodity cost data hub.
Roughly 8 to 12% of a typical UK business electricity bill
Renewables Obligation: what it is, who charges it, and what it pays for
What it is
The Renewables Obligation charge in plain English
The largest single NCC after DUoS. Funds the UK’s oldest large-scale renewable energy scheme via Renewables Obligation Certificates (ROCs). RPI-indexed buyout price.
Introduced 2002 (Utilities Act 2000). Closed to new entrants 2017. Runs until ~2037.
Who charges it
The body that sets the rate
Ofgem (obligation level in Feb) + HMRC (RPI-indexed buyout price in Oct)
Unit
p/kWh
Applies to
UK business electricity
What it pays for
Where the revenue ends up
Onshore/offshore wind, biomass, solar farms built before 2017
Share of typical bill
8 to 12%
Ofgem's annual RO obligation level and buyout price imply 8 to 12% of a non-domestic electricity bill, recovered through suppliers.
Published rate history
| Financial year | Rate | YoY change | Source |
|---|---|---|---|
| FY2020 | 2.314p/kWh | - | published |
| FY2021 | 2.445p/kWh | +5.7% | published |
| FY2022 | 2.564p/kWh | +4.9% | published |
| FY2023 | 2.849p/kWh | +11.1% | published |
| FY2024 | 2.897p/kWh | +1.7% | published |
| FY2025 | 3.306p/kWh | +14.1% | published |
Forecast trajectory
AI-assisted forecasts from our deep-research pipeline. P10, P50 and P90 are the 10th, 50th and 90th percentile outcomes; P50 is the central estimate.
| Year | P10 | P50 | P90 | Confidence | Rationale |
|---|---|---|---|---|---|
| 2025-26 | 3.100 | 3.310 | 3.500 | high | Based on current regulatory framework and near-term visibility |
| 2026-27 | 3.200 | 3.420 | 3.650 | high | Inflation indexation effects well understood |
| 2026 | - | 3.420 | - | - | |
| 2027-28 | 3.300 | 3.530 | 3.800 | med | Weather variability introduces uncertainty |
| 2027 | - | 3.530 | - | - | |
| 2028-29 | 3.400 | 3.640 | 3.900 | med | Peak year with compound inflation effects |
| 2028 | - | 3.640 | - | - | |
| 2029-30 | 3.200 | 3.500 | 3.800 | med | Inflection point where decline begins |
| 2029 | - | 3.500 | - | - | |
| 2030-31 | 2.900 | 3.300 | 3.700 | low | Certificate expiry effects become significant |
| 2030 | - | 3.300 | - | - | |
| 2031-32 | 0.5500 | 1.450 | 2.100 | low | Major certificate expiry creates wide uncertainty |
| 2031 | - | 3.101 | - | - | |
| 2032-33 | 0.2500 | 1.000 | 1.350 | low | Asset closure uncertainty and regulatory risk |
| 2032 | - | 3.163 | - | - | |
| 2033-34 | 0.1500 | 0.6000 | 0.8500 | low | Placeholder pending clarity on late-life behaviour |
| 2033 | - | 3.226 | - | - | |
| 2034-35 | 0.0500 | 0.2500 | 0.4500 | low | Terminal phase with regulatory intervention risk |
| 2034 | - | 3.291 | - | - |
Renewables Obligation FAQs
What is the Renewables Obligation charge?
The largest single NCC after DUoS. Funds the UK’s oldest large-scale renewable energy scheme via Renewables Obligation Certificates (ROCs). RPI-indexed buyout price.
Who sets the Renewables Obligation rate?
The Renewables Obligation rate is set by Ofgem (obligation level in Feb) + HMRC (RPI-indexed buyout price in Oct).
What does Renewables Obligation pay for?
Renewables Obligation revenue supports Onshore/offshore wind, biomass, solar farms built before 2017.
What is the current Renewables Obligation rate?
For financial year 2025, the published Renewables Obligation rate is 3.306 p/kWh.
What is the Renewables Obligation forecast?
Our latest forecast for 2026-27 is 3.420 p/kWh (high confidence). Inflation indexation effects well understood
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Rate data sourced from the Purely Energy non-commodity cost data hub (dh.purelyenergy.co.uk). Published rates come from statutory publications by the body listed above. Forecasts are AI-generated from published guidance and market trends; treat P50 as a central estimate and reference P10/P90 for sensitivity.