Energy price hike for millions of households

After three lockdowns, food and HGV driver shortages, and amidst a global pandemic, the last thing that is needed is more costs going up. But unfortunately, the cost of energy supply has risen dramatically. The price of gas for suppliers has increased by 250% since the start of the year, with a 50% rise just since August.

Consumers are protected by the Ofgem’s energy price cap but this is reviewed twice a year and is being increased to a new energy cap rate of £1277 an increase of £139 for direct debit customers and an increase of £153 to £1309 for pre-payment customers.

Electricity is dependent upon gas for its generation. When most of us have already been negatively affected by the consequences of lockdowns, this additional expense is sure to be met with frustration and desperation.

Why are my energy prices going up?

• Wholesale prices up by 250%
• Cold winter
• Refineries being closed down
• Electricity supply cables damaged

Ofgem CEO Jonathan Brearley spoke to the BBC, defending the decision to raise the cap on energy prices, explaining that there has been an exponential rise in wholesale energy prices globally, leading to unsustainable prices for providers to sell at. He urged people to make informed decisions about which energy providers they chose to use, using comparison sites to find the cheapest and best option available for them.

Who is affected?

Domestic energy, directly linked to wholesale energy prices, have risen by a record amount in 2021, affecting the energy bills of around 11 million households, or around 50% of all UK households and around 4 million prepayment customers.

Influenced directly by a price cap set twice a year by the regulator, dictating the prices that energy providers can set per unit of energy, households in England, Wales and Scotland who have remained loyal to one supplier, or who have prepayment meters or have agreed reduced rate deals will be stung the hardest by these changes. The other 50% of households who have agreed fixed deals will be protected from the newly incurred costs until their deal runs out.

A spokesman for EDF commented, “We know this will be worrying news for the customers of all suppliers. We will be directing financial assistance to those most in need through a £1.9m support fund, helping customers reduce their bills, manage their debt and help with costs for things like more energy-efficient white goods.”

What can you do?

You can reduce your usage by:

• Switching lights off
• Change bulbs to LEDs
• Turning appliances off standby
• Using washing machines and dishwashers only when full
• Turn your thermostat down by 1 degree
• Filling your kettle with the right amount of water

What solar can do for you

There are some big benefits to switching to a renewable energy source, these include:

• Reduced monthly energy cost
• Cutting carbon footprint
• Protect you from energy price increases
• Taking your property off the grid
• Increase your property value

Due to the current national news surrounding our energy supplies and worry of increased costs we wanted to break down how solar reduces your monthly bills.

A typical 4kw solar PV system could save you between £288 – £360 per year without a battery and would cost between £3500- £5000, if the energy prices continue to increase renewable energy will reduce your monthly energy cost even more.