Ofgem’s new price cap means a 5% increase in energy bills

Get ready for a 5% increase in energy costs next year, announced by Ofgem the energy regulator.

Is energy going up in January 2024?

Cornwall Insight reports that Ofgem plans to raise the Energy Price Cap on January 1st. This means that energy customers may have to pay more for their energy.

The price limit will increase to £1,928 per year from January until March 2024. This new limit is almost £100 more than the current limit of £1,834. Ofgem’s November 23 energy cap price announcement will postpone hopes of a relief from the current high cost of living.

What is the Ofgem’s energy price cap?

The energy price cap is the maximum amount energy suppliers can charge people for each unit of energy.

Energy bills in January will go up because purchasing energy in bulk will become pricier, says Cornwall Insight. Liquefied natural gas (LNG) production problems in Australia have caused these fluctuating prices.

Energy bill predictions take these changes into account. At the beginning of the year, energy prices are usually higher when bought in large quantities. This affects our estimate of people’s energy bill payments.

What does the increase in energy bills mean?

This energy cap increase couldn’t come at a worse time, coinciding with the coldest stretch of winter. As we huddle indoors during Christmas and transition into the new year, energy usage will be at its peak.

This price rise will hit households at the worst time of the year, when they’re using more energy to keep warm in the depths of winter. The current price cap system is no longer effective and needs reform to foster a more competitive market while safeguarding households.

Richard Neudegg, the director of regulation at Uswitch.com, warns.

Energy saving tips

Tips for households about to face the heat of rising costs:

  • Use Energy-Efficient Appliances: Opt for appliances that conserve energy and reduce consumption.
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  • Install a Smart Thermostat: Regulate your home’s temperature efficiently with a smart thermostat.
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  • Seal Leaks and Insulate: Ensure your home is well-insulated to minimise heat loss.
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  • Get Best Energy Deals: Compare energy offers
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  • Switch to Renewable Energy: Consider adopting renewable energy sources like solar panels and heat pumps.

 Apply for Free Heat System Upgrade

Dr. Craig Lowrey suggests moving from fossil fuels to reliable and eco-friendly energy sources within our own country. This shift will help us to be less vulnerable to international factors and, in turn, stabilize our energy prices.

Government incentives are available to make the transition to renewable energy easier than ever. Government grants, such as the ECO4, help UK homeowners with financial assistance towards installing renewable heating systems.

Homeowners can get free installation of heat pumps, solar panels, and insulation. Not only will this contribute to a greener environment, but it will also bring significant savings on energy bills.

Crucial for households to adopt energy-saving measures and explore renewable alternatives. In uncertain times, we can make smart choices and use government help to create a cheap and lasting energy future.

Comments
Air source heat pump running cost: How much are you saving? November 29, 2023

[…] true that electricity costs more per unit than gas, with the current price cap at 29p/kWh for electricity and 7p/kWh for gas. To match the running costs of gas central heating, a […]

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