Energy bills are rising. The Energy Price Cap for the period from 1 October to 31 December 2024 is £1,717 per year.
This is the “headline” figure, but it’s not the full picture.
Some households will pay significantly more than this amount, with certain homes facing energy bills that are £655 or more higher than the cap.
Why? It all comes down to energy usage and how much you consume compared to the average household.
Energy Price Cap
The Energy Price Cap sets a maximum price for electricity and gas per unit (measured in kWh), but it does not limit how much you will pay overall.
The £1,717 figure reflects the typical household’s energy cost, assuming a median usage level. If your usage is higher than this, your bill will be above £1,717, and if it’s lower, your bill will be below this figure.
The Energy Price Cap is applied to the variable charges of energy, such as the price per kilowatt-hour (kWh) of electricity and gas. It’s not a cap on the total bill amount, so the total cost you pay depends directly on how much energy you use.
How Does Energy Usage Affect Your Bill?
Homes don’t use the same amount of energy. Some people use a lot more energy than others. This difference is why the typical household price cap doesn’t reflect everyone’s costs. According to Ofgem, the energy regulator, households fall into percentiles based on their energy usage. These percentiles show the distribution of energy usage across all homes.
For example:
- The 25th percentile of homes (the lowest 25% of energy users) use about 8,000 kWh of gas and 1,800 kWh of electricity per year.
- The 75th percentile of homes (the top 25% of energy users) consume 17,000 kWh of gas and 4,300 kWh of electricity per year. These homes use more than double the energy compared to those in the 25th percentile.
To give you a better idea, here’s how energy bills differ based on usage:
| Usage Percentile | Gas (kWh/year) | Electricity (kWh/year) | Total Bill |
|---|---|---|---|
| 25th Percentile | 8,000 | 1,800 | £1,278 |
| 50th Percentile | 12,000 | 2,900 | £1,797 |
| 75th Percentile | 17,000 | 4,300 | £2,452 |
Why Some Pay £655+ More
The biggest takeaway is that high energy users can end up paying a lot more. For instance, households in the 75th percentile of energy usage (those that consume more than 75% of the population) will pay £655 more than the headline cap of £1,717.
- At the 25th percentile (low usage), the bill is £1,278, which is £439 less than the cap.
- At the 50th percentile (average usage), the bill is £1,797, which is £80 more than the cap.
- At the 75th percentile (high usage), the bill is £2,452, which is £655 more than the cap.
The difference between the lowest and highest users is striking. Those who use more energy are paying a premium for their higher consumption.
The Key to Saving Money: Monitor Your Energy Use
Reducing energy consumption can have a significant impact on your bill. In fact, households using energy at the 25th percentile pay much less than those at the 75th percentile. If you fall into the higher usage bracket, tracking your energy usage and making changes can help you avoid paying those extra £655 or more.
Small adjustments, like turning off unused appliances, improving home insulation, or using energy-efficient devices, can reduce your usage and lower your bill.
Conclusion
The upcoming Energy Price Cap of £1,717 is just a headline figure. Your actual bill depends on how much energy you use.
High-energy households (those in the 75th percentile) will pay £655 more than this figure, while those in the 25th percentile will pay much less. Monitoring and reducing your energy usage is the best way to save money and avoid paying more than you need to.
If you find your energy bills creeping higher, it may be time to evaluate your consumption and make some adjustments. Don’t let your energy usage push you into the higher brackets of pricing.
