Energy bills are set to decrease by an average of 7% starting from October 1, 2023, following Ofgem’s announcement of a new, lower Energy Price Cap.
The Energy Price Cap will be reduced to an average of £1,923 annually for households using both gas and electricity and paying through direct debit. This change will impact all those currently on standard variable tariffs, which includes most individuals not currently on a fixed rate plan.
Although this news will likely be welcomed by many, it’s important to note that even with this decrease, most people will still be paying more for their energy compared to last winter. This is due to the absence of the £400 energy bill support provided by the government. As of now, no additional support has been indicated for this upcoming winter. This matter has caught the attention of Martin Lewis and his organisation, Money Saving Expert, who are actively advocating for further assistance.
What can we expect for future energy prices?
Regrettably, the prospect of sustained lower prices is uncertain, as each Price Cap only remains effective for three months. (For more detailed information on how it functions, we recommend checking out Money Saving Expert’s Energy Cap FAQs.)
According to current projections, experts are predicting a 6% increase in January 2024, resulting in a typical annual cost of £2,033 for a household. Subsequently, a 3% decrease is projected in April, bringing it to around £1,964 per year, followed by a further 2% decrease in July, lowering it to £1,917. However, it’s important to recognize that making predictions further into the future becomes increasingly uncertain. If these projections hold true, individuals will still be paying nearly twice as much as they were before the energy crisis struck in autumn 2021.
Is it advisable to secure a fixed energy plan?
A glimmer of positivity in the energy market lately has been the reintroduction of several tariffs that fall below the existing Price Cap. Based on the current predictions for the Energy Price Cap, it seems sensible to consider opting for a fixed deal if the cost is below the current cap set for July. This is particularly pertinent if you want certainty regarding your energy expenses. However, it’s a multifaceted decision, so we recommended that you refer to Money Saving Expert’s guide on sticking with, switching, or fixing your energy tariff to explore all your options.
A majority of these deals might not be accessible through comparison websites, but the situation is evolving rapidly.
What else can you do to save money on energy bills?
Apart from keeping an eye on energy price changes, there are proactive steps you can take to cut down on costs. One effective approach is installing solar panels. By generating your own electricity through solar panels, you can decrease your reliance on the grid, resulting in lower energy expenses.
You can also partner up your solar panels with an effective solar battery storage system. This will enable you to store excess electricity generated by your solar panels during sunny periods. This stored energy can then be used during times when the sun isn’t shining to further reduce your reliance on the grid. This dynamic shift not only leads to decreased reliance on external energy sources but also translates to significant reductions in your energy bills.
Additionally, you might consider replacing gas-powered appliances like cookers with electric alternatives. Electric appliances are becoming more energy-efficient, and when paired with your own solar power system, using electric devices instead of gas can contribute to reducing your overall energy costs.
Learn more about how solar power can reduce your bills
Embracing solar power and transitioning to electric appliances can help you save money on your energy bills while also contributing to a more sustainable future. To learn more about how solar can help you, get in touch using the contact form and Purelec Energy will guide you on your cost cutting journey.