Energy price cap to drop 8% in April, Cornwall Insight says

• The projection means dual-fuel households will pay £138 less per year
• Wholesale prices have also “softened” in recent weeks
• This energy price cap prediction will be at its lowest since 2024

Bills could fall by 8% in April, according to Cornwall Insight’s latest forecast for the next energy price cap, meaning bills could be the lowest they’ve been since July 2024.

If the prediction is right, the cap will be at £1,620 per year for a typical dual-fuel household, a £138 decrease from the January 2026 level of £1,758. 

Dr Craig Lowrey, principal consultant, Cornwall Insight said the decision in the Budget to shift 75% of green levies away from energy bills and into general taxation. Lowrey also said the government’s decision not to further extend the Energy Company Obligation (ECO) Scheme and an update from NESO on interim electricity Transmission Network Use of System charges has contributed to the forecast. 

“While these charges, which contribute to the costs of building, maintaining and operating the grid, are still set to rise, the increase per household is now £10 less than previously expected,” Lowrey said.

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While the government’s decisions will ease pressure on billpayers, Lowrey said costs “aren’t vanishing” and will still be paid by the public. 

He explained that wholesale prices have also “softened” in recent weeks, helped by increased US LNG supply, declining pressure from EU gas storage requirements, milder winter weather conditions and renewed optimism around the possibility of an end to the Russia-Ukraine war. 

Lowrey said these developments have contributed further downward pressure on forecasts, however in contrast to previous years when wholesale gas prices were the primary cause of bill movement, today policy changes dominate. 

Although the Transmission Network Use of System charges will increase by less than forecast for all electricity consumers, unlike households, Cornwall Insights Business Energy Bill Index, due to be released later this month, shows costs are still expected to rise from many businesses from April unless they qualify for relief under the government’s energy intensive industry scheme. 

DESNZ is currently consulting on moving the Warm Home Discount cost from the standing charge element of household energy bills to the unit rate, and as a decision by the government is still pending, this potential change has not been factored into Cornwall Insights projections.

“The transition to net zero isn’t cheap, but it’s the only route to genuinely lower bills in the long term,” he explained.

“Turning back now might look tempting, but in the long run, it would continue to leave consumers exposed to the same volatile global markets that contributed to the energy crisis.”

“Crucially, as we move forward, vulnerable households must be protected. Cutting bills today is welcome, but without targeted support and a clear plan for fairer funding, the benefits of net zero could bypass those who need them most.”

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Tamara Birch Newsletters and sponsored content editor

Tamara is a journalist with more than six years experience writing about environmental topics. This includes advising small businesses on cost-effective ways tom become more sustainable, from installing to solar panels and heat pumps and reducing waste. She has used her journalist and research skills to become highly knowledgeable on sustainable initiatives, issues, and solutions to help consumers do their bit for the environment – all while reducing monthly costs. Now, she’s using this experience to advise homeowners on the benefits of installing low-carbon technologies. She is also qualified in offering innovative initiatives to improve sustainability practices in businesses, from advertising to marketing and publishing.

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