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Consumers Guide to Buying Portable Heaters

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Energy Price Caps Explained

This is the government's attempt, after years of pleading with them to intervene, to ensure we pay a fairer price for our energy.

After 6 weeks the cap has been raised and energy prices are being hiked by 10%+ from 1st April 2019 see Energy Price Hike post

Energy price caps limit the price a supplier can charge you per kWh of electricity and gas It does not cap your final bill as this depends on the amount of energy you use.

However, it does not go far enough as prices on all tariffs are not capped!

We prefer to see an across the board cap on the price per kWh. With the energy, suppliers told they cannot charge more than £x per kWh with no exemptions.

If you are on a fixed-term energy tariff that you have chosen, your prices will not be protected by the caps.

The price of your tariff will only be capped if:

  • You use a prepayment meter. This applies if you use a prepayment meter to pay for your energy. It lasts until 2020.
  • You get the government’s Warm Home Discount and are on a  'default' or 'standard variable energy tariff
  • You are on a 'standard variable' energy tariff or a tariff you haven’t chosen (a 'default' tariff)

Suppliers must cut their prices to the level or below the capped price,  if you’re on one of the tariffs currently priced above the cap, you will save money.

If costs to supply your energy fall, the cap makes sure suppliers pass on savings. If these costs rise, then the caps ensure price rises are justified.

Where caps apply your capped tariff will depend on many things: how you pay (direct debit or standard credit), where you live and what type of meter you have.

There are also regional differences in the caps to reflect how much it costs to transport energy across the energy network to where you live.

Our advice is to switch suppliers and get a better deal, see our Beat Energy Price Rises post



January 19, 2021 Larry Snow

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