Energy Costs

Household energy costs in the UK can vary widely depending on your location, the size of your home, and your energy usage habits. However, we can provide a general overview of what the typical household might expect in terms of annual energy bills, as well as specific factors that influence costs.

Average Household Energy Costs (2025 Estimates):

For an average household in the UK, the combined cost of gas and electricity is roughly:

• Annual Total: £2,500–£3,000
  This is for a typical household Gas & Electric with average energy consumption.

  • Electricity: £1,200–£1,500 per year (or about £100–£125 per month)

  • Gas: £1,200–£1,500 per year (or about £100–£125 per month)

  • Annual Total Electricity only £4,000-£10,000 PA
  • This is typical household for electricity only using electricity for heating

Breakdown by Energy Type:

1. Electricity:

   • Cost per kWh: Around £0.30 per kWh (this can vary depending on your supplier, region, and the time of day).

   • A typical household uses about 3,600 kWh of electricity per year, though this can vary based on how many people live in the home, the size of the property, and how many energy-intensive appliances you use (like electric heating or air conditioning).

2. Gas:

   • Cost per kWh: Gas prices can fluctuate, but they tend to be lower than electricity, around £0.08–£0.10 per kWh for typical domestic gas usage.

   • A typical household might use 12,000–15,000 kWh of gas per year, mainly for heating and hot water.

Energy Price Guarantee (EPG):

• The Energy Price Guarantee (EPG) has been a key measure by the UK government to help limit energy bills, especially during periods of high market volatility.

  • For an average household, the EPG has capped the annual cost at £2,500 (combined gas and electricity).

  • However, this cap is likely to change over time as the government adjusts its policies and as wholesale prices fluctuate.

  • The EPG does not reflect your energy costs for your home, its only used as a benchmark. If you use more energy you will pay more.

Factors That Affect Household Energy Costs:

1. Energy Usage:

   • Heating: Gas is often the largest component of energy costs in UK households. Homes that use gas for central heating and hot water tend to have higher bills.

   • Appliances: The more electrical appliances you have, particularly energy-hungry ones like tumble dryers, dishwashers, and electric cookers, the higher your electricity bill.

   • Lighting: Switching to energy-efficient lighting, such as LED bulbs, can reduce electricity usage.

2. Home Size:

   • Larger homes tend to have higher energy usage due to greater space to heat and cool. They also typically require more electricity to power larger appliances and lighting.

   • Homes with more rooms or older properties that are less insulated may have higher heating costs.

3. Energy Efficiency:

   • Homes with better insulation (such as double-glazing, loft insulation, and wall insulation) will retain heat more effectively, reducing the need for heating and thus cutting gas costs.

   • Modern, energy-efficient boilers and appliances will also reduce your energy consumption.

4. Location:

   • Energy costs can vary by region, particularly with gas, since distribution costs differ depending on where you live.

   • Rural areas may see slightly higher distribution costs than urban areas, leading to higher overall bills.

5. Tariff Structure:

   • Standard Variable Tariffs (SVTs) tend to be more expensive than fixed-rate tariffs, where you lock in your energy prices for a certain period.

   • Time-of-use tariffs, like 11.30pm – 5.30 am charge lower prices during off-peak hours (night-time), so they can be beneficial for households that can shift energy use to those times.

6. Government Support and Subsidies:

   • There are various government schemes, such as the Warm Home Discount, which can help lower bills for eligible households, especially those on low incomes or with certain health conditions.

7. Smart Meters & Monitoring:

   • With smart meters becoming more common, households can track their energy use in real time and adjust habits accordingly. This can help reduce waste and potentially lower costs.

How to Lower Household Energy Bills:

1. Solar panels: If you’re looking to save or off set your energy bills Solar Panels can take back control of energy costs saving 40% per year. 

2. Solar Panels & Battery: You can save up to 90% per year on electricity bills with the correct sized system and battery or batteries.

3. Energy-Efficient Appliances: With Solar you can divert spare electricity to the hot water immersion giving free hot-water  from the Solar Panels saving an extra £200-£300 per year.

4. Smart charge your car. Again using spare electricity you can divert this to your car giving you miles more for your money, Saving an extra £200-£300 per year. Many electricity suppliers will give a cheap overnight electricity price between 6-12p per KWH, this can be used to charge batteries in the winter months and use during the day.

Household Energy Cost Breakdown Example:

For a small to medium-sized home with average usage:

• Gas:

  • Annual usage: 12,000 kWh

  • Cost: 12,000 kWh x £0.08 per kWh = £960 per year

• Electricity:

  • Annual usage: 3,600 kWh

  • Cost: 3,600 kWh x £0.30 per kWh = £1,080 per year

Total Annual Cost = £2,040

For larger homes or those with higher-than-average usage, these costs can increase accordingly. For homes with electricity only these prices can be substantially more.