The cost of electricity in the UK is subject to fluctuations due to market conditions, government regulations, and the payment method used by consumers.
One of the key mechanisms in determining how much consumers pay for electricity is the Energy Price Cap (EPC), which has been implemented to protect consumers from excessive price increases.
As of July 2025, the UK will be operating under a new price cap system for electricity, impacting the average cost of electricity per kilowatt-hour (kWh).
1. Energy Price Cap (EPC) – Q3 2025
From 1 July 2025 to 30 September 2025, the Energy Price Cap will set the maximum cost that energy suppliers can charge per kWh and the standing charges (fixed daily fees) for electricity and gas. The details are as follows:
Electricity:
- Unit cost (variable) per kWh: 25.73p (decrease of 5% from Q2 2025).
- Standing charge per day: 51.37p/day (a 5% decrease from the previous quarter).
Gas:
- Unit cost (variable) per kWh: 6.33p (decrease of 9% from Q2 2025).
- Standing charge per day: 29.82p/day (a 9% decrease from the previous quarter).
Understanding the EPC:
The price cap sets the maximum amount suppliers can charge for each unit of electricity consumed (per kWh). However, it is important to note that the cap does not apply to the total cost of your bill. The cap is meant for typical usage, and if your household consumes more or less electricity than the average, your bill will be higher or lower than the capped figure of £1,720 per year.
This price cap is reviewed quarterly by the regulator OFGEM, so the rates are subject to change based on market conditions.
2. Electricity Costs by Region
Electricity prices can vary by region in the UK. This difference is largely due to the operational costs of energy suppliers, local network charges, and the distance from power plants. Below are the average electricity unit prices by region (including VAT at 5%) for Q3 2025:
| Region | Electricity Cost (per kWh) | Standing Charge (per day) |
|---|---|---|
| North West | 26.7p | 48.8p |
| Northern | 25.0p | 57.6p |
| Yorkshire | 24.8p | 56.3p |
| Northern Scotland | 25.8p | 58.7p |
| Southern | 25.9p | 42.3p |
| Southern Scotland | 24.5p | 54.3p |
| N Wales and Mersey | 27.2p | 67.7p |
| London | 25.1p | 43.8p |
| South East | 26.4p | 45.3p |
| Eastern | 26.0p | 45.9p |
| East Midlands | 25.1p | 46.8p |
| Midlands | 25.1p | 50.7p |
| Southern Western | 26.3p | 51.7p |
| South Wales | 26.3p | 49.4p |
| GB Average | 25.7p | 51.4p |
As observed, N Wales and Mersey region has the highest electricity costs, while Southern Scotland tends to have the lowest.
3. Historical Price Changes
To understand the trajectory of electricity prices, it’s helpful to look at the historical price trends in the UK. Since 2010, electricity prices have consistently risen due to a variety of factors such as inflation, the global energy market, and increasing demand. Here is a snapshot of the average electricity prices per kWh over the past few years:
| Year | Unit Cost (pence per kWh) |
|---|---|
| 2010 | 12.7p |
| 2011 | 13.7p |
| 2012 | 14.5p |
| 2013 | 15.2p |
| 2014 | 15.6p |
| 2015 | 15.4p |
| 2016 | 15.4p |
| 2017 | 16.5p |
| 2018 | 17.8p |
| 2019 | 19.4p |
| 2020 | 19.6p |
| 2021 | 21.4p |
| 2022 | 32.2p |
| 2023 | 33.6p (first half) |
| 2023 | 30.0p (third quarter) |
| 2023 | 27.0p (fourth quarter) |
| 2024 | 24.5p (second quarter) |
| 2024 | 22.36p (third quarter) |
| 2025 | 24.86p (first quarter) |
As shown, there was a significant spike in electricity prices in 2022 and 2023, driven by global energy issues, including the geopolitical situation involving Russia and Ukraine. However, prices have started to stabilize in 2024 and are expected to be more predictable in 2025.
4. Future Price Predictions
Looking ahead, electricity prices are likely to remain influenced by several factors:
- Global Energy Market: Events such as geopolitical instability or global supply shortages will continue to impact electricity prices. The ongoing global energy crisis and the increasing shift to renewable energy sources will affect the cost of electricity generation.
- Demand and Weather: Seasonal weather events, including cold winters or hot summers, can lead to spikes in demand. Additionally, renewable energy sources such as wind and solar are often dependent on weather patterns, which can lead to price fluctuations.
- Energy Transition: The UK’s move towards decarbonizing its energy system is expected to drive some of the future price changes. While the government is aiming to reduce reliance on fossil fuels, the transition could involve higher initial costs before economies of scale reduce prices.
5. Payment Methods and How They Affect Costs
The way you pay for your electricity has a direct impact on both your variable unit prices and your standing charges. In general, direct debit is the cheapest option, followed by prepayment meters, and standard credit typically costs the most. The standing charges tend to be similar across payment methods, but variable unit charges vary more significantly.
Here’s a breakdown of electricity unit prices for different payment methods in Q3 2025:
| Payment Method | Electricity Unit Cost (p/kWh) |
|---|---|
| Direct Debit | 25.7p |
| Standard Credit | 27.2p |
| Prepayment | 24.9p |
6. Energy Price Comparisons
With fluctuating prices, it’s always advisable for consumers to compare energy deals to secure the best prices available. Many energy companies offer fixed-rate deals, which provide price security for a certain period (usually one to three years). Fixed-rate plans could be especially useful if you’re worried about price increases in the colder months.
Tools such as Uswitch can help consumers find the best deals and avoid the uncertainties associated with variable tariffs.
Conclusion
The average cost of electricity per kWh in the UK is determined by a complex set of factors, including the Energy Price Cap, geographical location, payment method, and seasonal demand. As of Q3 2025, the price cap for electricity is 25.73p per kWh, with regional variations and standing charges also playing a key role in the total cost.
Households with typical usage will pay £1,720 per year, but this can vary depending on your actual consumption. It’s important for consumers to stay informed about energy price changes and consider switching suppliers or payment methods to minimize costs.
For the most accurate and up-to-date information on energy prices, always refer to OFGEM or use energy comparison tools.
