What is the 2024 Energy Price Cap?

In recent years, energy bills have seemingly spiralled out of control. Lockdown, Russia’s invasion of Ukraine and increased demand have created a perfect storm that has led to financial difficulties for households up and down the UK.

Many people had been anxiously awaiting news of the energy price cap, which was announced back in February. However, it can be difficult to understand just what this will mean for your home. What is the new energy price cap and when does it change? And how exactly is the energy price cap calculated?

The team here at Pacifica is here to explain with this guide to the 2024 energy price cap.

What is the energy price cap?

The energy price cap essentially sets out the maximum amount that your supplier can charge you for each unit of gas and electricity you use. While it doesn’t limit the amount of energy you can use, it prevents the price from skyrocketing unexpectedly.

The price cap was established in January 2019 by Ofgem – the independent regulator for gas and electricity in the UK – with one simple goal in mind: to prevent households on variable energy tariffs from being ripped off by gas and electric companies setting their own extortionate rates. 

When will the energy price cap change?

The current energy price cap will change on the 1st of April 2024. The good news is that this figure has decreased by 12%, falling from £1,928 a year to £1,690 a year. 

But how long will the April 2024 energy price cap last? The energy price cap is reviewed four times a year: in January, April, July and October. This means that the upcoming price cap will last until the 30th of June 2024, with the next figures being announced on the 24th of May 2024.

How is the energy price cap calculated?

The energy price cap is calculated based on the costs that energy suppliers face. Wholesale energy is the largest cost and this price is constantly fluctuating; that’s why the energy price cap must be reviewed every three months. However, there are other expenses that must be taken into account, such as:

• Network costs for maintaining gas and electricity grids
• Operating costs, such as staff and infrastructure
• Policy costs, such as renewable energy subsidies
• VAT
• Profit – the price cap allows for a profit margin of 1.9%

Does the energy price cap affect me?

If you’re on a variable energy tariff then yes, the energy price cap will affect you; if you’re on a fixed-term energy tariff, you won’t be covered by the price cap. However, it’s important to note that the energy price cap does not limit how much you’ll be charged in total; it simply limits the price you can be charged per unit. So the more energy you use, the more you’ll pay.

How to reduce your energy bills

Despite the fact that the energy price cap has fallen, it’s still over £600 more expensive than the same period back in 2020. Undoubtedly, most homeowners are looking for ways to reduce their energy bills.

Your appliances make up a massive portion of your energy usage, so one of the best things you can do to lower your energy bills is to invest in regular appliance maintenance. If you’ve noticed an issue with your appliance – maybe your oven is taking longer than usual to heat up or your freezer is too cold – although this might seem like a mere inconvenience, it could be increasing your energy consumption significantly. 

In these circumstances, it’s best to consult a trusted appliance repair specialist, like Pacifica. We can examine your appliance and identify any underlying problems that might be causing excessive energy consumption, ensuring your appliance is running exactly as it should be. A high-quality repair from us will also help to prolong the life of your appliance, saving you the money and hassle of having to buy a new one at a time when you might already be tightening your belt. We’ve compiled some more energy-saving hacks for your appliances.

If your appliance isn’t working correctly and you’re worried this might be impacting your energy bill, the experts at Pacifica can help. We can perform repairs on a huge range of white goods from all leading brands and, with an extensive network of engineers operating nationwide, you’ll never be left without your appliance for long.

Contact us to find out more or arrange your cost-effective repair.