- Electricity usage is measured in kilowatt-hours (kWh)
- Electricity currently costs 22.36p per kWh
- Electricity will increase to 24.50p per kWh from 1 October
- Solar panels will reduce your energy bills by 70%, on average
- The cost of domestic energy in the UK is largely determined by the energy price cap
The cost of electricity per kWh changes every six months, in line with Ofgem’s price cap announcements. The most recent announcement is valid until 30 September and electricity costs 22.36p per kWh. This was a 7% drop, on average, compared to earlier this year. However, from 1 October to 31 December, prices will increase by 10% to 24.50p per kWh.
Your electricity bills, however, will be based on how much you use, which you’ll pay through direct debit every month or year, or using a pre-payment metre.
The good news is you can reduce your monthly electricity usage by switching to renewable energy or making small changes at home, like switching off unused plugs.
No matter, it’s important to be aware of how much electricity costs, and how much you use. You can do this by taking regular metre readings or investing in a smart metre.
This guide will explain everything you need to know about the cost of electricity per kWh and how Ofgem’s price cap impacts households, which can help you make decisions about whether renewable energy is worth the investment.
How much does electricity cost per kWh?
The cost of electricity in the UK per kWh is 22.36p and will remain so until 30 September 2024. From 1 October to 31 December, this will increase to 24.50p per kWh.
However, this price can vary slightly depending on how you pay and where you live. Below is the average price for energy if you pay by direct debit.
| Energy source | 1 January – 31 March 2024 | 1 July – 30 September 2024 | 1 October – 31 December 2024 |
|---|---|---|---|
Electricity | 28.62p per kWh | 22.36p per kWh | 24.50p per kWh |
Gas | 7.42p per kWh | 5.48p per kWh | 6.24p per kWh |
The Energy Price Cap decrease in April 2024
The Energy Price Cap fell by 7% on average on 1 July 2024, falling to £1,568 a year for a typical household paying by Direct Debit.
Nonetheless, the current drop meant a £122 reduction in the cap set between 1 April to 30 June 2024, which was £1,690. This provided some relief for a lot of homeowners and saw the return of fixed rate pricing from some energy suppliers, after a long stint of many riding the waves of wholesale pricing.
Despite this drop, however, it’s predicted that the next Energy Price Cap will increase by 9% to £1,714 a year for those who pay by Direct Debit. The Money Saving Expert has predicted that January 2025 will incur a further increase of 0.5% to £1,723 a year.
Electricity cost per kWh per region
As mentioned above, the average cost of electricity varies by region, and changes every three months once Ofgem announces a new price cap.
As of August 2024, the regional price cap for those who pay by Direct Debit and a single rate:
| Region | Daily standing charge July to September 2024 | Daily standing charge October to December 2024 | Unit rate July to September 2024 | Unit rate October to December 2024 |
|---|---|---|---|---|
| North West | 51.19p per day | 52.04p per day | 22.59p per kWh | 25.01p per kWh |
| Northern | 71.22p per day | 72.1p per day | 21.28p per kWh | 23.19p per kWh |
| Yorkshire | 67.45p per day | 68.32p per day | 21.22p per kWh | 23.51p per kWh |
| Northern Scotland | 61.12p per day | 61.98p per day | 22.90p per kWh | 24.96p per kWh |
| Southern | 63.36p per day | 64.28p per day | 22.49p per kWh | 24.46p per kWh |
| Southern Scotland | 63.33p per day | 64.17p per day | 21.83p per kWh | 24.62p per kWh |
| North Wales and Mersey | 67.05p per day | 67.89p per day | 23.23p per kWh | 23.96p per kWh |
| London | 40.79p per day | 41.59p per day | 23.53p per kWh | 25.39p per kWh |
| South East | 56.93p per day | 57.84p per day | 23.13p per kWh | 25.24p per kWh |
| Eastern | 49.94p per day | 50.84p per day | 23.08p per kWh | 25.21p per kWh |
| East Midlands | 56.02p per day | 56.90p per day | 21.65p per kWh | 23.77p per kWh |
| Midlands | 62.75p per day | 63.62p per day | 21.69p per kWh | 23.83p per kWh |
| Southern Western | 67.21p per day | 68.12p per day | 22.10p per kWh | 24.18p per kWh |
| South Wales | 63.27p per day | 64.12p per day | 22.37p per kWh | 24.49p per kWh |
| Great Britain average | 60.12p per day | 60.99p per day | 22.36p per kWh | 24.50p per kWh |
If you pay different prices for the used electricity at different times of day, also known as a multi-rate and includes Economy 7 meters, this is what you’ll pay under the cap if you pay by Direct Debit:
| Region | Daily standing charge July to September 2024 | Daily standing charge October to December 2024 | Unit rate July to September 2024 | Unit rate October to December 2024 |
|---|---|---|---|---|
| North West | 50.97p per day | 51.81p per day | 21.09p per kWh | 23.68p per kWh |
| Northern | 70.91p per day | 71.78p per day | 20.03p per kWh | 22.12p per kWh |
| Yorkshire | 67.37p per day | 68.18p per day | 20.02p per kWh | 22.46p per kWh |
| Northern Scotland | 62.21p per day | 62.93p per day | 21.49p per kWh | 23.72p per kWh |
| Southern | 63.70p per day | 64.53p per day | 21.07p per kWh | 23.39p per kWh |
| Southern Scotland | 64.50p per day | 65.16p per day | 20.47p per kWh | 22.79p per kWh |
| North Wales and Mersey | 66.92p per day | 67.69p per day | 21.70p per kWh | 24.05p per kWh |
| London | 40.71p per day | 41.50p per day | 21.93p per kWh | 24.24p per kWh |
| South East | 57.39p per day | 58.21p per day | 21.58p per kWh | 23.91p per kWh |
| Eastern | 50.44p per day | 51.26p per day | 21.56p per kWh | 23.90p per kWh |
| East Midlands | 55.72p per day | 56.63p per day | 20.37p per kWh | 22.66p per kWh |
| Midlands | 62.79p per day | 63.62p per day | 20.47p per kWh | 22.74p per kWh |
| Southern Western | 67.91p per day | 68.68p per day | 20.70p per kWh | 23.00p per kWh |
| South Wales | 62.76p per day | 63.63p per day | 20.97p per kWh | 23.30p per kWh |
| Great British average | 60.31p per day | 61.11p per day | 20.69p per kWh | 23.28p per kWh |
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:
Type of payment | Cost of electricity from 1 April to 30 June 2024 | Standing charge cost from 1 April to 30 June 2024 |
|---|---|---|
Standard variable | 24.50p/kWh | 60.10p/day |
On receipt of a bill | 25.79p/kWh | 65.88p/day |
Prepayment meter | 23.72p/kWh | 60.10p/day |
Fixed rate | Unchanged until the end of the contract | Unchanged until the end of the contract |
Economy 7 | Varies by supplier | Varies by supplier |
How much have electricity prices increased over the past 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 crises 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.
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 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 household 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 releases at the start of each new price cap period are just averages.
What is a kWh?
A kWh is used to measure the amount of energy someone is using. You’ll most likely have seen it on your energy bills, as electricity providers charge customers based on how much electricity they use per kWh.
For example, one kWh of electricity is enough to power a 100-watt lightbulb for 10 hours.
Some might get kW and kWh mixed up, but they are different. A kW measures how much power an electric appliance consumes, while 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 metres, as well as high and low energy use, to come up with the current average. Your actual consumption might be higher or lower than the estimates Ofgem gives.
Ofgem’s average 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 a standard variable tariff.
Energy use | Home size and number of occupants | Average annual electricity use |
|---|---|---|
Low | Flat/1-bedroom house with 1 to 2 occupants | 1,800 kWh |
Medium | 2-3-bedroom house with 2 to 3 occupants | 2,700 kWh |
High | 4+ bedroom house with 4 to 5 occupants | 4,100 kWh |
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.
Without the price cap, it’s likely UK customers would be paying more for their electricity.
Thanks to the Ofgem price cap, households with a pre-payment meter no longer receive an Energy Price Guarantee discount on their gas and electricity bills because the price cap is lower.
What’s the average energy bill?
Between 1 July to 30 September 2024, the energy price cap is set at £1,568 per year for a typical UK household who use electricity and gas and pay by Direct Debit. This is £122 lower than the cap set between 1 April to 30 June 2024 (£1,690).
This equates to an average household monthly electricity bill of £130.42.
From 1 October to 31 December 2024, the energy price cap will set at £1,717 per year for a typical UK household who pay by Direct Debit, an increase of £149 per year, increasing monthly bills to around £143.08.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 suppliers 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.
There are also small changes you can make straight away to reduce your monthly bills. These include:
- Low-energy LED lighting: The average household has around 34 light bulbs, each using energy and will spend about £77 on lighting each year. LED lighting uses 75% less energy than halogen lightbulbs, reducing the demand on electricity
- Check your appliances: When buying new appliances, choose energy efficient appliances. According to the Energy Saving Trust, cooking, cooling or freezing and wet appliances account for 13% of an average household’s energy consumption
- Switch to solar energy: Solar energy can save you between £289 to 3675 per year on your energy bills, while reducing your carbon emissions.
- Turning plugs off: Walk your home and unplug anything that isn’t in use. This will ensure you’re not using excess electricity you don’t need to.
- Install a smart meter: A smart meter will help you understand your electricity usage, which will allow you to monitor your daily usage and you can react accordingly to reduce it.
Summary
- Ofgem determines how much energy is used by the typical household by looking at historical averages
- 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.
- A kWh is used to measure the amount of energy someone is using
- Energy suppliers are also required by Ofgem to provide customers with a payment plan they can afford if they’re unable to pay their bills.
- f 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
- The cost of electricity varies based on how you pay and what type of tariff you are on
