According to energy consultancy Cornwall Insight analysts, energy costs for most British households are expected to fall around 18% from July. The price cap, set by Ofgem, will likely fall to £2,054 a year for average use, saving an average household around £446 a year.
The expected drop in energy costs comes after sharp price increases. Set The price cap at £1,971 a year in October 2021, but it has since risen to £2,017 a year for April 2022-June 2022 and £2,800 a year for July-September 2022.
Several factors, including the global gas crisis and the war in Ukraine, have driven the rise in energy prices. However, the price cap is expected to fall in July as wholesale energy prices have declined.
Despite the expected drop in energy costs, Cornwall Insight has warned that household energy bills will likely remain well above pre-pandemic levels soon. The consultancy forecasts that the price cap will rise to £2,287 a year in October 2023 and £2,390 a year in January 2024.
The Government has introduced several measures to help households with rising energy costs, including a £200 energy bill rebate and a £150 council tax rebate. However, these measures are not expected to offset rising energy prices’ impact fully.
Households are urged to reduce their energy consumption, such as switching to a cheaper energy tariff, installing insulation, and using energy-efficient appliances.
Here are some tips for reducing your energy consumption:
- Turn off the lights when leaving the house.
- Unplug appliances when you’re not using them.
- Wash clothes in cold water.
- Air-dry your clothes instead of using the dryer.
- Take shorter showers.
- Seal any air leaks around your home.
- Install insulation in your attic and walls.
- Upgrade to energy-efficient appliances.
Following these tips can save money on your energy bills and help the environment.
Here are some additional details about the expected drop in energy costs:
- Ofgem, the UK energy regulator, sets price caps.
- The price cap is based on the cost of wholesale energy, which has been falling in recent months.
- The price cap will fall by 18% for most households from July 1st.
- The price cap will still be higher than before the recent rise in energy prices.
- Families are still being urged to reduce their energy consumption to save money.
- The fall in wholesale energy prices.
- The Government’s £200 energy bill rebate.
- The Government’s £150 council tax rebate.
However, it must be noted that the price cap is still expected to be higher than before the recent increase in energy prices, which means that households will still need to reduce their energy consumption to save money.
Cornwall Insights forecasts that the Ofgem price cap will drop to £2,054 a year for average use, saving a household around £446 annually.
Craig Lowrey, principal consultant at Cornwall Insight, said: “With so many people suffering from a cost-of-living crisis, it will hopefully bring some cautious optimism that the era of exceptionally high energy bills is behind us.”
Despite the expected decline, he warned that household energy costs would soon remain above pre-pandemic levels.
Set the price cap in April 2020 at 1,162 pounds a year.
Cornwall Insights forecasts that the cap will fall slightly again in October, to an average of £1,976 a year before rising to £2,045 in January 2024.
