Energy Price Cap Predictions for 2025

With energy prices constantly shifting, understanding Ofgem’s price cap is crucial for budgeting your household expenses. In 2025, costs are expected to rise, affecting millions of UK households. This guide breaks down the upcoming price cap changes, what they mean for your power bills, and practical steps you can take to reduce your costs. Whether through smart tariffs, energy-efficient appliances, or solar battery storage, these options will help you navigate the rising costs and make informed decisions to keep your bills in check.

The rising electricity tariffs concern everyone. Because UK electricity depends heavily on fossil fuels and global market forces, Ofgem reviews prices four times yearly and sets a price cap to limit the unit rates and standing charges that energy suppliers can charge for their default or standard variable tariffs. According to the UK Parliament, the record prices in 2022 would have led to an 80% increase without government intervention, which limited it to just 27% back in October 2022.

Still, prices continue to rise because Ofgem sets the cap quarterly by considering how much it costs suppliers to provide electricity and gas. This includes the purchase cost of wholesale energy, maintaining and repairing infrastructure, and standard operating costs.​ 

The cap is based on unit rate. However, it’s often reported as the annual cost for a dual-fuel customer who pays by direct debit and uses electricity and gas, living in an average UK home with average power use. If you live in a larger home or use more energy, your total will be higher than the cap. On the other hand, those living in smaller homes or monitoring and reducing their energy use at home will pay less. 

The current energy cap is £1,738 for average dual-fuel customers on the default or standard variable tariffs until 31 March 2025. It changes to £1,849 on 1 April until 30 June. This significant increase is based on the current instability of wholesale energy prices prompted by global events. While it’s predicted to decline slightly this summer, it’s also expected to increase again this autumn, producing an overall rate increase of roughly 7% at the end of the year compared to the beginning.

Default or standard variable tariffs are typically the most expensive rates. If you’re on a default rate, contact your energy provider and see if they offer cheaper tariffs, time-of-use tariffs, smart meters (if you don’t already have one), or other options to help lower costs. Also, check out our list of ways to save energy at home below.

The new average unit rates and standing charges for electricity and gas after the latest April cap goes into effect will be as follows:

Ofgem’s cap only applies to the unit rates and standing charges for the default or standard variable tariffs, usually providers' most expensive rates. If you’re unsure what tariff you are on, contact your provider to ask them. Then, explore options to lower your average monthly electricity bill. See if your provider offers lower tariffs or consider switching to a variable time-of-use tariff, which can save you significant money if you can switch more of your appliance usage to off-peak hours. 

The easiest way to take advantage of time-of-use tariffs is to have a battery storage system like the EcoFlow Power Ocean (Single-Phase). You can use battery backup to run appliances during peak hours and recharge your battery at night when rates are cheaper. However, the best way to take advantage of battery storage systems is to recharge them during the day with solar panels and use battery storage during peak electricity rates. 

To make it easier to understand how the caps affect your bill, they often express it in terms of annual costs for the average UK home using the average amount of electricity and gas since the cap affects both. Before 1 April, that amount was £1,738 yearly. After 1 April, that is going to jump to £1,849. Remember, this is based on the average customer. If you use more power or live in a larger home than average, your bills will be higher. On the other hand, if you live in a smaller house or use less power than average, your bills will be lower.

The best way to reduce your costs is to make changes to save power at home.

• Use smart plugs and a smart meter to monitor your usage better and understand which appliances use the most electricity. If you’re on a variable time-of-use tariff, monitor what’s being used during peak tariffs so you can reduce them. 
• Lower your thermostat, especially at night or when you’re not at home. Installing a smart thermostat will make it easier than adjusting it manually.
• Upgrade to more energy-efficient appliances. Look for those with an “A” rating instead of “C-G,” which are considered inefficient.
• Insulate your home better, including the ceiling, loft, floors, and walls.
• Replace old single-glazed windows with double-glazed ones. 
• Seal doors and windows with caulking or insulating foam.
• Switch to LED lights and turn them off when they are not needed.
• Take shorter showers.
• Only run full loads in the dishwasher and washing machine. 
• Take advantage of dry, sunny days and use a clothesline to dry clothes. 
• Switch energy providers.
• Switch to a variable time-of-use tariff and monitor your usage closely. For instance, running dishwashers and washing machines during off-peak hours can save you significant money.
• Supplement your power with solar panels.

If you already have solar panels, install an EcoFlow PowerOcean DC Fit to easily retrofit your solar system with a battery storage system without changing your current inverter. Then, add an EcoFlow Power Ocean (Single-Phase) battery system, which starts at 5kWh and is expandable up to 45kWh with additional batteries. Use the EcoFlow Power Ocean (Three-Phase) on a three-phase system. When you have battery backup, you can still benefit from cheap solar power at night, during bad weather, and use battery power during peak tariff hours to save even more money. 

On 1 April 2025, the average annual bill for dual-fuel customers will jump from £1,738 to £1,849. The following price cap on 1 July 2025 is expected to decline slightly to £1,839. However, that is expected to increase slightly in October, up to £1,859 yearly.

Overall, UK prices are expected to increase in 2025. After 1 April, they are expected to increase from £1,738 annually for an average UK home to £1,849. While the price is likely to drop to £1,839 in July, it‘s expected to increase again in October to £1,859.

In 2025, UK electricity rates are expected to fluctuate up and down. However, they are expected to increase by approximately 7% overall.

As energy prices fluctuate, staying proactive is key to managing your costs. With the April 2025 price cap increasing to £1,849 annually for the average dual-fuel customer in the UK, exploring alternative tariffs, energy-efficient appliances, smart meters, and solar power can make a significant difference. Also, consider investing in innovative solutions like the EcoFlow Power Ocean (Single-Phase) to optimise usage and save on bills. By taking these steps, you can better navigate the rising costs and gain more control over your household expenses.