What’s new in energy pricing
NB This blog piece was written in March 2025 when the UK Energy Price Cap was set to rise the following month. Depending on when you are reading this the actual figures may have changed again and now be different. Also the ever-changing geopolitical energy situation may have modified.
UK Energy Price Cap Increase – Here’s How Infra-Red Can Save You Money
Despite the fact that a combination of political factors and market forces* mean the energy market overall is seeing a decrease in prices, the UK domestic energy price cap increases (again) next month. Price cap regulation means the cap will rise by 6.4% meaning the average bill for a household paying by direct debit will increase from £1,738 to £1,849 – so £111.00 per year. Not surprisingly consumers are asking themselves the question: ‘should I fix my energy?’ Especially at a time when Economy 7 tariff prices are set to be scrapped.
*There has been an increase in the supply of oil from the Arab States and Donald Trump is threatening to increase supplies from the USA. (This of course may change by tea-time.) At the same time milder weather generally has reduced demand.
The Price Cap Duality Conundrum
So here’s the thing. There are two things that are capped. The first is the price of every unit of energy, gas and/or electricity, supplied. What you actually pay for your energy consumption each month varies with the amount of energy you consume.
The second thing that is capped is the daily ‘standing charge’ your energy company is allowed to make to cover the costs of actually getting the gas or electricity to your house. It’s not so much about generating the power, as connecting you to, and maintaining, the grid.
One way of looking at it is that if you have a car, you’ll aways have costs like tax and insurance before you even pay to put petrol in it and go for a drive. The annual cost then becomes all about how much you drive it.
What makes this somewhat of a conundrum in this next price cap increase is that OFGEM, who control the price cap, have increased both the price of electricity and gas, going against market rates, but quite significantly decreased the standard daily charge for electricity by 7p per day. The standing charge for gas has gone up 1p per day. This somewhat ‘contrarian’ behaviour makes it very difficult for consumers to estimate and sensible UK electricity price forecast for 2025. It’s much the same for the gas rate.
It doesn’t help those looking for cheap heating solutions, the cheapest way to heat a room, or even the cheapest and most efficient way to heat a house in the UK.
You Can’t Do Anything About Your Standing Charge
Sadly, just like tax and insurance for your car, the standing charge is the standing charge, and you can’t do anything about it. From 1st April the standing charge for electricity will become 53.8p and for gas 32.67p. So if you have both you’re paying 86.47p per day just to have your energy company get power to your front door. That’s £315 per year which, when you think about it, isn’t that bad for the privilege of having power ‘on tap’.
But You Can Control Your Energy Usage – And That’s Where Infra-Red Comes In
When it comes to how to reduce your gas bill, the simplest answer is to switch to electricity. The great news is that you can closely control your energy consumption by only heating what and where you need to heat, when you need to heat it. Many households heat far too many rooms for too long with warmth that is wasting energy. Many homes are warm at ceiling level but much cooler at sitting-room sofa level simply because all the heat from traditional radiators rises. What’s more the heat lingers well after everybody has gone to bed and goes to waste.
In total contrast Infra-Red heating is instantly controllable and heats people directly. Sit by an Infra-Red heater, turn it on, and you immediately feel the benefit. Turn it off and you immediately stop paying for energy. Of course, by all means, turn on the IR heater in your bedroom from your mobile App 5 minutes before you get off the sofa to go upstairs – that’ s all it takes to ensure you get undressed in the warm, then turn it off again. When it comes to the question ‘how much does an Infra-Red heater cost to run?’ the simple answer is ‘less!’
It Doesn’t Take Rocket Science to Reduce Heating Costs – Just Common Sense
Saving money on your heating bills is a matter of common sense. In these days of expensive energy you need tactical ‘zonal heating’ rather than ‘whole room’ heating. Certainly you no longer need ‘whole house’ heating. Sure it means an investment in modern heating technology, but that is easily offset by much lower running costs at pennies per hour.
We’re on your side. We’re not suggesting you completely bin your existing heating (although if you have gas the Government hope you will pretty soon now). We’d just like to help you save money and, at the same time, help save the environment as IR is much more sustainable and emission free than gas.
Will Electricity Prices Go Down?
In conclusion, why is energy so expensive? Basically due to reasons beyond the mere mortal’s control. The energy market is both complicated, due to national policy, and complex due to international markets. The government is trying to look after consumers with a price cap. On a domestic level it’s hard to plan a low-cost heating strategy. This can be especially true if you’re trying to determine the best heating system for an old house in the UK where heat pumps are unlikely to work, and you’re looking for alternatives to radiators.
