What Is The Energy Price Cap?

There has been a lot of talk about energy prices over the past few years, and you may have heard the term ‘energy price cap’. With rising bills and an ongoing cost-of-living crisis, people may be relieved to hear that there is a cap on energy prices. Let’s have a look at the energy price cap and what it means for household energy bills.

Energy Price Cap Explained

Put simply, the energy price cap is the highest price that energy companies can charge per unit of electricity or gas. Additionally, there is a maximum chargeable amount on the standing energy charge, which is an unchanging daily amount. For a typical household using a normal amount of electricity, the price cap stands at £1,738 as of January 2025.

This doesn’t mean that this is what you will pay over the course of the year. The cap applies to each individual unit of electricity. If you as a household use much more or much less than the average, your bills will go up or down accordingly.

The energy price cap is set to rise on the 1st April 2025, according to Ofgem, when the price cap on electricity will rise to 24.86 pence per kWh and for gas to 27.03 pence per kWh.

Conserving Energy

There are ways to try and keep your energy bills lower. Ensure you are only using electricity when strictly necessary – turn off lights if you’re not in the room, and don’t put appliances on standby. Switch to LED lightbulbs, and turning your thermostat down can reduce your heating costs.

Another excellent way to reduce your energy bills is having solar panels installed on your roof to harness UV rays and turn them into energy. Although there is some initial outlay, as you would expect, solar panels pay for themselves in the long term. For specialist help with choosing and installing solar panels Gloucester, visit https://gsmlimited.com/services/solar-panels/gloucester.

Further information and support with understanding energy bills can be accessed via Ofgem or by contacting your energy supplier.