What’s the cost of electricity per kWh?

✔ Electricity usage is measured in kilowatt-hours (kWh)

✔ Electricity will typically cost you 24.50p per kWh

✔ Solar panels will cut your electricity bills by 70%, on average

The energy market can be quite volatile, with prices going up and down, depending on a multitude of global factors.

A lot of our electricity is produced using fossil fuels, which is why when the price of gas changes, so does the price of electricity.

Electricity cost can be influenced events such as a spike or drop in demand, geopolitical events, natural disasters, and the availability of gas supplies.

It’s important to be aware of how much electricity costs, and how much of it you use, since this will give you an idea of what your next bill might look like.

If you have solar panels, it’s important to be aware of electricity  price changes, as these will affect who much you save on your bills, and when you break even on your purchase.

This guide will help you find out how all you need to know about the cost of electricity per kilowatt hour (kWh), and how the price cap affects prices.

How is energy cost determined in the UK?

The cost of domestic energy in the UK is largely determined by the energy price cap.

The UK’s energy price cap and Energy Price Guarantee set a maximum price that energy suppliers can charge the average consumer for each kilowatt hour (kWh) of energy they use. These ensure that prices for customers on default energy tariffs are fair.

The price cap is set by Ofgem, the government’s energy regulator, and it changes every three months.

It’s calculated using Typical Domestic Consumption Values (TDCVs), which give consumers an idea of the average energy use of different households.

Even though the price cap is given as a set number, that number represents what the average household will pay.

It’s not a set upper limit, and some people will pay less and some more, based on how much electricity they use – those who use less than the average will pay less than the cap, those who use more will pay more.

The price cap also varies slightly by region, so the figures Ofgem puts out at the start of each new price cap period are just averages.

What is a kilowatt hour (kWh)?

A kilowatt hour (kWh) is used to measure the amount of energy someone is using. If this term sounds familiar, it might be because you’ll often find it on your energy bills. Electricity providers charge customers based on how much electricity they use per kWh.

For example, one kWh is enough to power a 100-watt lightbulb for 10 hours.

Be careful not to get kW and kWh mixed up. A kW measures how much power an electric appliance consumes, whilst a kWh measures the energy an appliance has consumed over a period of time.

What is typical domestic consumption?

Ofgem determines how much energy is used by the typical household by looking at historical averages.

They take into account different types of meters, as well as high and low energy use, to come up with the current average. Your actual energy use might be higher or lower than the estimates Ofgem gives.

Ofgem’s averages values are then used to estimate the annual amount that would be charged to a typical household who pays by Direct Debit and is on standard variable tariff.

How much does electricity cost per kWh?

The average cost of electricity in the UK is 24.50p per kWh, from 1 April to 30 June 2024.

However, the price will vary slightly depending on how you pay and where you live.

Electricity costs for different ways to pay

The cost of electricity varies based on how you pay and what type of tariff you are on. There are four types of tariff:

• Standard variable tariff, or ‘default tariff’ means the price of energy changes every time the price cap changes, usually every 3 months.
• You can also pay on receipt of a bill in the mail, which comes every three months
• A prepayment meter is pay-as-you-go, where you top up your meter using a prepayment card purchased at various locations or online.
• People with fixed rate tariffs will continue to pay the electricity cost that they’ve agreed to pay until the end of their contract.
• Economy 7, or multi-rate, is an electricity tariff offering cheaper rates for off-peak hours and more expensive rates during peak hours.
• Everyone must pay a standing charge, which is a fixed daily amount you have to pay for energy, no matter how much you use.

Here’s a table outlining the cost of electricity based on payment type:

Cost of electricity per kWh by UK region

The cost of electricity per kWh isn’t universal across the whole of the UK.

Below is a table showing the price per kWh of electricity for each UK region (in pence) between 1 April and 30 June 2024.

What is the energy price guarantee?

The energy price guarantee, which capped the average annual household energy bill at £1,690, was designed to protect customers from energy price increases by limiting the amount energy suppliers can charge per unit of energy used.

Between April and June 2023, UK customers would have been paying more per kWh of electricity if the government’s Energy Price Guarantee wasn’t in effect.

However, since 1 July 2023, households without a pre-payment meter no longer receive an Energy Price Guarantee discount on their gas and electricity bills.

This is because the Ofgem price cap is lower than the Energy Price Guarantee level.

As of July 2023, the Energy Price Guarantee was instead used to align costs for prepayment meter (PPM) and direct debit customers.

How much have electricity prices increased over the last decade?

The price of electricity has been steadily increasing over the past decade, but the war in Ukraine has put extra strain on the energy market.

As the percentage of the UK’s electricity that comes from renewables increases, electricity prices could become more stable.

Electricity from UK renewables isn’t affected by geopolitical crisis like the war in Ukraine, which can make energy prices shoot up.

However, some renewables, such as solar and wind, are weather dependent, and so electricity prices could increase or decrease in the future depending on the weather. That’s why having electricity from a mix of different renewables is important.

To get a better idea of how much electricity prices have increased over the past decades, check out the table below.

What’s the average energy bill?

UK customers living in a typical three-bedroom home will have an average energy bill of £1,690, for both gas and electricity, between April and June 2024.

This equates to average monthly energy bill of a little under £141.

What energy bill support is available?

There are various government-backed schemes available to help some UK customers manage their energy bills, including:

• Warm Home Discount: some low income households or those on the Guarantee Credit element of Pension Credit can get £150 off their energy bills for winter 2023-2024
• Winter Fuel Payment: people born on or before 25 September 1957 can get between £250 and £600 to help pay their energy bills
• Cold Weather Payment: £25 for each 7 day period of very cold weather (zero degrees celsius or below) between November 2023 and March 2024. Available for people on certain benefits
• Child Winter Heating Payment: available to families in Scotland with disabled children. The payment for winter 2023-2024 is £235.70

Energy supplier’s are also required by Ofgem to provide customers with a payment plan they can afford if they’re unable to pay their bills. All you have to do is contact them.

If you still can’t come to an agreement with your supplier, you can contact Citizens Advice, or Advice Direct Scotland if you live in Scotland.

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