Energy Saving

Navigating the energy price cap: implications for households

Published on
July 26, 2023
Woman sitting on kitchen floor organising energy bills

As a leading boiler installer, we keep our finger on the pulse of all things energy, helping to keep you in the know and your home running efficiently.

What is the 'energy price cap?'

The 'energy price cap' is a rule that sets the highest price energy suppliers can charge for each unit of energy used. As of July 1st, this cap has been lowered. This means UK households can expect lower energy bills. The energy regulator, Ofgem, now estimates the average yearly gas and electricity bill to be £2,074. This is a drop from previous years when the government had an 'Energy Price Guarantee' that capped bills at £2,500.

How it works: The energy price cap

In England, Wales, and Scotland, the energy price cap determines the costs of variable tariff energy deals. This cap changes every three months under Ofgem’s direction. When the situation in Ukraine caused energy prices to rise, the government set a limit to protect households. It's important to note that Northern Ireland operates differently, and bills are usually lower there.

Global impact on energy prices

Predicting the trajectory of energy bills is a complex task due to the influence of global issues, such as the war in Ukraine. Ofgem does not anticipate a return to pre-covid energy prices until the end of the decade at the earliest.

Energy usage and household bills

The calculations for a typical household are based on a direct debit customer using 12,000 kWh (kilowatt hours) of gas and 2,900 kWh of electricity a year. However, most households aren't typical. Your bill depends on how much energy you use, which in turn depends on how many people live in your house, the type of property, and its energy efficiency. The average household usage is calculated based on a customer using 12,000 kWh of gas and 2,900 kWh of electricity annually.

Payment methods affect cost

For those using prepayment meters, the cap should be the same for both forms of payment. However, those who pay via cash, cheque, or bank transfer, typically every three months, will pay significantly more. Ofgem argues these customers are more likely to fall into arrears.

Fixed deals and variable tariffs

The reduction in prices should signal the resumption of competition in the market, as suppliers start to offer fixed deals to customers. This means people will be able to switch supplier for a gas and electricity price that is set for a certain period of time. Unlike variable tariffs, these are unaffected by the cap.

Consumer groups and regulators suggest that this could be good news for consumers, but caution that such deals will not suit all circumstances. If variable deals continue to fall in price, anyone who locks into a fixed deal would miss out on those savings. Anyone considering signing up for a fixed deal should also pay close attention to standing charges and exit fees, rather than just the headline rate. In conclusion, while the energy price cap drop is good news for consumers, it's essential to understand how it impacts your energy bills and boiler installation costs. Always consider your household's specific energy needs and consult with a trusted boiler installation company like Padly for personalized advice.

How does this affect my boiler installation?

In the context of boiler installation, understanding these energy price changes is crucial. The cost of running your boiler contributes to your overall energy bills. Therefore, when planning a boiler installation, consider the energy efficiency of the model you choose. More efficient boilers may have a higher upfront cost but could save you money in the long run due to lower energy consumption.

Furthermore, the type of boiler can also impact your energy costs. Combi boilers, for example, are known for their efficiency as they only heat water as and when needed. System and conventional boilers, on the other hand, store heated water which can lead to heat loss and higher energy costs.

Luckily at Padly we understand how important being energy efficient is in the current climate to our customers which is why we committed to only providing the best boilers with the highest energy performance cerftificates EPC rating. Browse our boiler installation options and boiler catalogue here to find out more.

Spread the cost with Padlys 0% APR finance options

Logic System combi boiler with 0% finance offer from Padly

Sign up for exclusive blog posts in your inbox every month!

By clicking Sign Up you're confirming that you agree with our Terms and Conditions.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Read more from our blog

Text on a blue background that reads: Glow-worm boilers in the spotlight. Next to this is an image of a Glow-worm boiler installed in a kitchen cupboard.
Boiler Models
March 1, 2024

In the spotlight: Glow-worm boilers

Discover the reliability, efficiency and affordability of Glow-worm boilers at Padly. Explore their unique features, benefits, and models in our comprehensive spotlight blog.
Text on a blue background that reads: The energy price cap - an update. Next to this is a happy couple looking at their reduced energy bill statement
Energy Saving
February 27, 2024

Understanding the energy price cap drop

Discover how the upcoming energy price cap drop could impact your household budget. Learn what this means for you and your household and how you can maximise potential savings.
Text on a blue background that reads: Discover the Nest Smart Thermostat. Next to it is a an image of a Nest Thermostat mounted on a wall.
Helpful Tips
February 23, 2024

Nest Smart Thermostat review

Discover the ultimate upgrade for your home's comfort and efficiency in Padly's review of the Nest Smart Thermostat. Learn about its sleek design, smart features, and energy-saving capabilities, and see why it can perfectly complement your new boiler.
Text on a blue background that reads: Vaillant Boilers, in the spotlight. Next to this is an image of a happy couple in their kitchen and you can see a Vaillant boiler installed in the background.
Boiler Models
February 21, 2024

In the spotlight: Vaillant boilers

Discover the excellence, reliability and high-quality of Vaillant boilers at Padly. Our in-depth overview explores models, stand out features and the unparalleled benefits of choosing a Vaillant boiler for your home.
Heading on a blue background that reads "Discover The Hive Mini Thermostat" Next to this is an image of a Hive Mini Thermostat mounted on a wall.
Helpful Tips
February 19, 2024

Hive Mini Smart Thermostat review

Discover the ultimate solution for modern home heating with our in-depth review of the Hive Mini Smart Thermostat. From its sleek design to intuitive controls and energy-saving features, explore how this device enhances comfort while reducing energy costs.
Title of blog placed on a blue background that reads: what are TRVs & do I need them? Next to this is an image of a TRV
Industry News
February 16, 2024

Everything you need to know about TRVs

Discover the importance of Thermostatic Radiator Valves in optimising heating systems for energy efficiency and compliance with building regulations. Learn how TRVs work, their benefits, and why investing in them is crucial for your home's overall comfort and efficinecy.
Text on a blue background that reads: Exclusive boiler bundle - what's included? Next to it is an image of a boiler with the bundle items around it.
Helpful Tips
February 12, 2024

Introducing our exclusive boiler bundle: enhance your heating experience

At Padly, we're committed to providing homeowners across the UK with not just reliable boiler installations, but also comprehensive solutions to elevate their heating experience. That's why we're thrilled to introduce our exclusive Boiler Bundle, designed to complement your selected boiler and ensure optimal performance and efficiency.
Text on a blue background that reads: Gas boiler ban - everything you need to know. Next to this is an image of a wall mounted gas boiler in a utility room.
Industry News
January 17, 2024

When are gas boilers being phased out? The UK gas boiler ban explained

You may have heard about the UK gas boiler ban and understandably, you might feel confused or concerned about what this means for you and your home. In this comprehensive guide, our experts at Padly delve into the details of the gas boiler ban, by addressing key questions you may have in order to offer you reassurance and peace of mind.
Text on a blue background that reads: Boiler finance: A 2024 rundown. Next to this is an image of a young woman calculating her boiler finance options.
Boiler Finance
January 10, 2024

Boiler finance: A 2024 rundown

Are you in need of a new boiler but concerned about the upfront costs? At Padly, we understand that replacing your boiler can be a significant financial decision. That's why we offer affordable and convenient boiler finance options that allow you to spread the cost over time. Discover this guide for a detailed rundown of our 2024 boiler finance options.
Text on a blue background that reads: top home energy saving resolutions. Next to it is an image that shows a hand turning up a thermostat.
Energy Saving
January 9, 2024

New year's resolutions for a more energy efficient home

Start off the new year the right way with our top energy saving resolutions to help make your home more energy efficient. Find out how you can reduce your carbon footprint but also cut down on your utility bills this year.