What the Energy Price Cap changes mean for you

What the Energy Price Cap changes mean for you

Energy regulator, Ofgem, has raised the price cap on gas and electricity prices by 54%. This marks a historically high price cap adjustment that will impact over 22 million individuals in the UK.

This adjustment results in the average annual bill increasing from £1,277 to £1,971.

Those using prepayment meters will experience even more significant impact, with their yearly bill rising by £703 to £2,071.

What do the money experts say about the Energy Price Cap rises?

Colin from Money Matters notes that over the past 18 months, he’s observed a 50% increase in people seeking financial advice, implying that this will exacerbate challenges for lower-income households in the UK.

Behind these sharp increases lies the high cost of gas. Record hikes in global gas prices in 2021 and 2022 are responsible for more than 90% of electricity price hikes.

Meanwhile, Green Levies – the only means to reduce reliance on fossil fuels, have been reduced by a third.

Following the announcement, Martin Lewis, the money-saving expert, shared his thoughts on the situation on ITV.

“How the hell are so many people… they are not going to be able to afford it,” he commented.

He further emphasized that the planned 54% increase was “catastrophic and disastrous for people’s bills”.

Mr. Lewis urged the Government to “pull its finger out” and regarded this as a “cost of living crisis.”

Highest energy price increases in more than 15 years

Ofgem chief executive Jonathan Brearley commented,

“We understand that this increase will be extremely concerning for many people, especially those struggling to make ends meet. Ofgem will ensure energy companies support their customers in every possible way.”

“The energy market has faced an enormous challenge due to the unprecedented surge in global gas prices, a once-in-a-30-year occurrence. Ofgem’s role as an energy regulator is to guarantee that, under the price cap, energy companies can only charge a fair price based on the actual cost of supplying electricity and gas.

Our founder, Beau Savage, stated, “I’ve worked in the energy industry for 15 years and these increases are the highest I’ve ever seen. The government must assist people in transitioning to their own renewable sources like solar and provide interest-free loans or grants where feasible. For those already in fuel poverty, what will be the impact?”

h3>How can we combat the increase in household energy bills?

Reliance on fossil fuels is rapidly becoming outdated and is causing severe hardship for the most vulnerable in the UK. While subsidies and one-off payments can help those most affected by these price increases, they are not a sustainable long-term solution.

At Cardinal Energy, we understand that renewable energy sources are the solution to high energy bills.

On average, a solar system can reduce your electricity bills by 80%, or even eliminate them entirely. Generating your own electricity means you won’t be affected by future price hikes like the ones in today’s news, as you won’t need to purchase energy from the grid.

It’s time to embrace cleaner, greener, and more affordable energy, reducing dependence on non-renewable and increasingly scarce fossil fuels.