What’s The Cost of Electricity per kWh?

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

✔ Electricity will typically cost you 27.35p per kWh

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

The cost of electricity around the world is rising exponentially, particularly in the UK (meaning it's worth checking out solar panel prices).

Russia withholding gas supplies to European countries has triggered a global energy crisis. Not only is this impacting gas prices, but it’s also increasing the cost of electricity in the UK, since it heavily relies on gas to produce electricity.

This guide will help you find out how the cost of electricity per kilowatt hour (kWh) will affect you, what it means for industrial prices, and when we can expect it to come down.

What's on this page?

How much does electricity cost per kWh?

The average cost of electricity in the UK is 27.35p per kWh, from October to December 2023.

This unit rate, which was imposed by Ofgem in the form of a price cap, varies slightly by region.

Electricity cost per kWh on a standard variable tariff

Customers on a standard variable tariff will also pay 27.35p per kWh for electricity from 1 October to 31 December 2023.

Electricity cost per kWh on receipt of a bill

If you pay on receipt of a bill, you'll pay 28.79p per kWh for each kilowatt of electricity you consume from 1 October to 31 December 2023.

Electricity cost per kWh on a prepayment meter

You'll pay 26.92p per kWh for electricity if you use a prepayment meter from 1 October to 31 December 2023.

Electricity cost per kWh on a fixed rate tariff

People with fixed rate tariffs will continue to pay the electricity cost that they've agreed to pay until the end of their contract.

Standing charges

From 1 October to 31 December 2023, the standing charge for customers on default tariffs will be 53.37p per day for electricity.

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).

What would the price of electricity have been without the Energy Price Guarantee?

Between April and June 2023, UK customers would have be paying an average of £0.51 per kWh of electricity if the government's Energy Price Guarantee wasn't in effect.

The EPG, which capped the average annual household energy bill at £2,500, was designed to protect customers from energy price increases by limiting the amount energy suppliers can charge per unit of energy used.

It doesn't affect your life at the moment, but the EPG still exists at an average of £3,000. If Ofgem's Default Tariff Cap goes above £3,000 again at any point before March 2024, the EPG will kick in again.

How much money has the Energy Price Guarantee saved people in 2023?

The EPG has saved the average UK household around £320 in 2023, according to estimates released by the UK government.

That's a decent amount of money.

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.

Russia has withheld gas supplies from various European countries, which means nations, including the UK, are having to look for alternative ways to power homes.

On top of this, the UK relies heavily on gas from Norway. But after a summer of heatwaves, Norway – a country that’s energy mix usually consists of 90% hydropower – is having to limit its gas exports so it can use them itself.

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 ££1,923, for both gas and electricity, between October and December 2023.

This equates to average monthly energy bill of £160.

What energy bill support is available?

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

• Alternative Fuels Payment (AFP): It's possible to get up to £200 towards energy bills with AFP if you use alternative fuels, such as tank or bottled gas, liquid petroleum gas (LPG), oil, wood, or solid fuel. Your house will also have to be disconnected from the mains gas grid, which is usually true if you're using one or more of the aforementioned alternative fuels.
• The Energy Bills Discount Scheme: This scheme is designed to support businesses manage some of the costs of rising energy bills. Businesses will need to apply for this support and meet the eligibility criteria. Organisations that provide people with district heating may also get support from the Energy Bills Discount Scheme.
• Northern Ireland Energy Bills Support Scheme: If you live in Northern Ireland, you'll automatically get a £600 payment towards your energy bill.

When will the cost of electricity come down again?

The cost of electricity has come down now, but it won't return to normal levels until the end of 2024, at least.

Cornwall Insight’s principal consultant Craig Lowrey has warned against circling this date in your diary though, with the global energy market still in flux.

He said: “Given the current level of the wholesale price, this level of household energy bills currently shows little sign of abating into 2024.” Some even believe that electricity prices will never return to the levels we used to enjoy.

You can read our thoughts on whether the cost of energy bills will fall soon for more information.

Summary

As households across the UK brace themselves for another two years of rising energy bills, many people will be wondering how the government can reduce gas and electricity prices.

Renewables can play a huge role in bringing down the cost of energy in the UK. Although the upfront costs of solar and wind farms can be pricey – though not as expensive as fossil fuel refineries – once they’re up and running, they generate free energy.

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