On 25 August, Ofgem set the energy price cap for October to December at £1,923. That’s a reduction of £151 from the previous cap of £2,074.
The energy price guarantee (EPG) is still in place as a safety net incase energy prices exceed £3,000. This offered more protection than the price cap when energy prices were unstable in 2022.
Now, energy unit prices are regulated by the price cap. Because of this, there could be more options for switching energy providers to save money.
How has the energy price cap changed?
The energy price cap has dropped by £151 and comes into effect between October and December 2023. This means the average household is likely to pay £1,923 for their energy costs between October and December.
The prepayment metre price cap has reduced by £128 from £2,077 to £1,949.
The reduction shows that the wholesale cost of buying and supplying energy has significantly reduced.
Although this is encouraging, bills aren’t expected to return to pre-2020 levels before the end of the decade. That’s according to independent energy experts, Cornwall Insight.
The energy price guarantee is still in place as a safety net to protect people if energy costs reach over £3,000. The government introduced this in October 2022 to limit the price of energy unit rates.
Energy price cap predictions and unit prices for 2024
Here’s what the energy price cap* could look like in 2024:
| January to March 2024 | April to June 2024 | July to September 2024 | October to December 2024 | |
|---|---|---|---|---|
|
Electricity
|
£977.14
|
£941.16
|
£912.27 | £947.56 |
|
Gas
|
£955.10
|
£926.53
|
£909.81 | £926.58 |
|
Total
|
£1,932.24
|
£1,867.09
|
£1,822.09 | £1,874.14 |
*All figures taken from Cornwall Insight. These are predictions only and could change.
Energy unit prices* for 2024
| Electricity | January to March 2024 | April to June 2024 | July to September 2024 | October to December 2024 |
|---|---|---|---|---|
|
Standing Charge (£/day)
|
0.52
|
0.60
|
0.60 | 0.60 |
|
Price per unit (p/kWh)
|
29.48
|
27.12
|
26.12 | 27.31 |
| Gas | January to March 2024 | April to June 2024 | July to September 2024 | October to December 2024 |
|---|---|---|---|---|
|
Standing Charge (£/day)
|
0.29
|
0.30
|
0.30 | 0.30 |
|
Price per unit (p/kWh)
|
7.72
|
7.43
|
7.27 | 7.41 |
*All figures taken fromCornwall Insight. These are predictions only and could change.
Will I be able to switch to another energy deal soon?
Yes, a few energy suppliers have started to offer more fixed energy deals - but more could be available soon. To help you prepare for this, it’s worth signing up to our switch ready programme so we can tell you when there are more energy deals available. It takes less than 1 minute:
- Log in to your Confused.com account and confirm your address, energy usage and energy supplier's details.
- We'll send personalised energy deals straight to your inbox.
- Choose a deal you're happy with and we'll complete the switch for you.
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What is the energy price cap?
The energy price cap was introduced in 2019 to regulate what energy suppliers can charge per unit of energy. It helps to protect customers from paying high prices for their energy.
The price cap applies to customers on a default or standard variable rate energy tariff. Those on fixed energy deals aren’t affected by the price cap.
Remember, the price cap is a cap on what suppliers can charge per unit of energy - it's not a cap on your bill. So if you use more energy you could be charged more than the price cap amount.
What is the prepayment meter price cap?
The prepayment meter price cap works the same way as the energy price cap by limiting what suppliers can charge for energy per unit. Ofgem introduced the prepayment meter price cap in 2017.
How is the energy price cap calculated?
The energy price cap is based on a few different factors. Some of them are:
- The cost of fossil fuels
- Operating costs – for example, the cost for suppliers to send out tradespeople to fit smart meters or conduct general maintenance work
- Network costs – this covers building, operating and maintaining the pipes and wires that supply energy to your home
- Policy costs – for example government schemes to reduce emissions
To see the full list of factors, visit the Ofgem website.
What can I do if I'm struggling to pay my energy bills?
If you’re struggling to pay your energy bills, speak to your supplier.
Ofgem says that suppliers are obligated to offer payment plans and direct energy customers to any support that’s available. The organisation is also introducing a consumer code of conduct, and said that suppliers should be doing all they can to help vulnerable energy customers.
Ofgem CEO, Jonathan Brearly says:
There are signs that the financial outlook for suppliers is stabilising and reasonable profits are returning.[...]This means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter. This code will ensure there are clear expectations of supplier behaviours especially for their most vulnerable consumers with whom suppliers should be reaching out proactively, with compassion and understanding. There are great examples of suppliers already doing this but I want to see this become the norm in such an essential sector that has such a big impact on people’s lives.”
The government also has some energy grants in place to help vulnerable people too.
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