With the recent news of the energy price cap increasing yet again, it’s not so surprising that people want to be much more informed when it comes to knowing exactly how much they are going to be paying.
The current energy price cap stands at £1,923 per year (affective from the 1st October until the 31st December 2023).
However, it’s important to be aware that this is not a cap on the total figure you pay, but the unit cost per kWh, i.e. the £1,923 cap only applies to household’s with typical usage.
This means you will pay 27.0p/kWh for electricity and 7p/kWh for gas, inclusive of VAT, from 1st October 2023 until 31st December 2023.
Electricity Price Per kWh in 2023 UK
The actual cost of electricity per kWh is 27p per kWh.
This means that the Energy Price Cap (EPC) is currently £1,923 per year for a typical household.
How Much Does 1 kWh of Electricity Cost UK?
At present, the cost of 1 kWh of electricity is 27p per kWh.
What About the Cost of Gas per kWh?
Just like electricity, the price of gas has also seen a rapid increase in price.
In fact, at the last energy price cap, the cost of gas per kWh increased to 7p/kWh for gas.
Unit Cost of Electricity per kWh, by UK Region
A lot of people assume that the price of electricity per kWh is the same throughout the UK, but in fact it varies slightly depending on where you live.
The table below shows you how much electricity costs per kWh based on location (please note that these costs do not include VAT at 5%, if you would like to add VAT, multiply the number by 1.05).
|Area||Avg var unit price in 2021 (p/kWh incl VAT)||Avg var unit price in 2022 (p/kWh incl VAT)||April to June 2023 (excl VAT)||July to Sept 2023 (excl VAT)||Oct to Dec 2023 (excl VAT)|
Why Are Electricity Prices Increasing?
There are many reasons for the skyrocketing price of energy in the UK, and you may have noticed it’s a global issue, impacting every country that relies on gas and oil imports.
Due to Russian Gas and Oil being cut from the normal supply, this has led to an international shortage and due to many countries now looking for alternative providers, this has led to a surge in demand and in turn prices.
Check out our complete guide to UK gas imports if you are interested in learning more about where the UK get its gas from.
Unfortunately, the UK is not in a position to rely entirely on renewables like wind power, and so the only option is to ride the wave.
In response to the current energy crisis, the UK government recently published their Energy Security Strategy, which outlines how they intend to improve the countries’ energy mix and decrease reliance on imports over the coming decades.
The proposal includes plans to launch a new licensing round of exploratory gas and oil projects in the North Sea for Autumn 2022.
This will also be in conjunction with a new task force, the Gas and Oil New Project Regulatory Accelerators, providing support to new developments.
The aim of this is to increase the UK’s domestic supply of gas and oil and hopefully help ease the current energy crisis.
Should You Fix Your Energy Bills?
Unfortunately, there is no easy way to answer this question, since the energy market is extremely erratic and could continue to change.
For example, if you decided to move to a fixed tariff now, it could potentially protect you from the next energy price cap increase (set to come into force in January 2023).
However, for others it may end up making more financial sense to stay to the normal standard tariff and remain protected by the energy price cap.
According to a recent estimate from analysts at Cornwall Insight, average prices could increase to £4,649 come January, when another price cap is set. But this is just an estimate, there is no way to be 100% certain this will be the actual increase.
For the complete breakdown of how we determined whether it’s wise to fix your energy prices or not, see our complete guide to fixing your energy prices.
Electricity Costs and Payment Type
Many people wonder how much their energy bill may change based on the method they use to pay it.
It’s no secret that those on prepayment meters have traditionally paid the most, but how does it compare to direct debit and credit?
Well, it appears that right now those who opt to pay by credit e.g. credit card now pay the most.
In fact, average variable charges cost 9% more and fixed charges cost 22% more when paying by credit than paying by direct debit.
|Payment type||Credit||Direct debit||Prepayment|
|Area||Avg unit price (p/kWh)||Avg fixed cost (£/year)||Avg unit price (p/kWh)||Avg fixed cost (£/year)||Avg unit price (p/kWh)||Avg fixed cost (£/year)|
|Merseyside & North Wales||21.7||£97.0||19.7||£80.8||20.9||£73.2|
How Much Will Electricity Cost Per kWh in January 2023?
According to a recent estimate from analysts at Cornwall Insight, average prices could increase to £4,649 come January, when another price cap is set.
But this is just an estimate, there is no way to be 100% certain this will be the actual increase.
Come January, it’s estimated that the price cap increase will mean the average bill on a standard rate will jump to £384 per month.
It’s predicted that the energy price cap will further increase by 14% in April 2023, meaning you will likely end up paying around £438 a month, making the bill a whopping £4395 for the period of September 2022 to August 2023.