Households across the UK will save roughly £150 on their energy bills as green levies were axed as part of the Mini-Budget unveiled today.
The move comes as part of Prime Minister Liz Truss' plans to freeze energy bills at around £2,500 a year for someone with typical use.
The Tory leader had already confirmed green levies being scrapped will form part of that £2,500 figure, with it also being confirmed today in Government "Growth Plan" documents.
Green levies fund schemes like insulation and renewable energy.
Energy bills consist of many different parts and although most come from the gas and electricity a home uses, energy firms also add their own business running costs on to them.
Follow all the latest developments in our Mini-Budget live blog here
Green levies are part of wider policy costs - but the term was unclear and some commentators called all policy costs "green levies" with others were more specific.
Policy costs pay for things like the smart meter rollout as well as the Warm Home Discount, which is a £150 benefit to pensioners and qualifying households on benefits.
It also funds things such as insulation and boiler upgrade schemes and these costs currently add £153 a year to the average home on the Ofgem price cap tariff.
Energy experts had previously slammed the idea of scrapping these green levies but the announcement will no doubt be welcomed by many homeowners struggling with bills.
The Chancellor revealed the Government expects to spend £60billion in order to help UK households with energy bills.
He insisted that "help is coming" for people with soaring bills.
Mr Kwarteng added: "Based on recent prices the total cost for the energy package for the six months from October is expected to be £60billion.
"The heavy price of inaction would have been far greater than the cost of these schemes."
He also said: "We expect the cost to come down as we negotiate new, long term energy contracts with suppliers."
Shadow Chancellor Rachel Reeves called the Mini-Budget a "comprehensive demolition" of the last 12 years of Tories in power.
She said: "This statement is an admission of 12 years of economic failure."
Ms Reeves added: "The costs of the energy price cap will be funded by borrowing, leaving eye-watering windfall profits of the energy giants untaxed," with "working people" left to "pick up the bill".
