Energy price cap rise shows renewables aren’t optional

The energy price cap will rise by £63 in October, the third increase this year, pushing a typical dual-fuel household’s annual bill to £1,717. That is £400 more than two years ago, before the war in Ukraine sent wholesale gas prices into orbit. But as experts quoted by edie.net reaffirmed this week, the price cap rise is not inevitable. It is the consequence of a UK electricity system still tethered to gas prices, a design flaw, not a law of nature.

Why the price cap keeps rising, and what it costs your household

Ofgem announced the new cap on 27 August, citing wholesale gas prices that have climbed 12% since spring. The cap applies to 28 million households on default tariffs. For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, the increase means an extra £5.25 a month. That does not sound catastrophic, until you add the £89 rise in January and the £76 rise in April. Cumulative increase this year: £228.

Yet the underlying problem is structural. The UK’s wholesale electricity price is still set by the most expensive marginal generator, usually a gas plant. Even when wind and solar produce cheap power, the system price stays high. The result: households pay gas-determined rates for electricity that increasingly comes from renewables. As the Energy and Climate Intelligence Unit has pointed out, if UK electricity were priced at the average cost of generation rather than the marginal cost, bills would be roughly 20% lower.

What this means for your EPC and your home’s value

Every price cap rise shows energy efficiency is the only hedge that pays back. A home with an EPC rating of D or below typically spends £500–£800 more on heating than a C-rated home, according to the Energy Saving Trust. The cap rise accelerates that penalty. For homeowners planning to sell, the gap matters: properties rated C or above sell for 5–10% more on average, per Nationwide data.

The quickest EPC wins are loft insulation (cost: £300–£500, saving £200–£300 a year) and cavity wall insulation (£500–£1,000, saving £250–£350 a year). Both typically lift a D-rated home to C. Solar panels, at £5,000–£7,000 installed, can add up to two EPC bands and cut electricity bills by £400–£600 a year, but only if the roof faces south or east-west and is unshaded.

Grants, timelines, and the real-world catch

The government’s Boiler Upgrade Scheme offers £7,500 towards an air-source heat pump, enough to cover roughly half the installation cost. The Great British Insulation Scheme (ECO+) provides up to £1,500 for loft or cavity wall insulation for low-income households. Yet uptake is slow: only 60,000 heat pump grants were claimed in the first two years, against a target of 600,000 by 2028. The catch is installer capacity. There are roughly 4,000 certified heat pump installers in the UK, compared with 130,000 gas boiler fitters. Until that pipeline grows, wait times for quotes can stretch weeks.

But the price cap rise creates a clear deadline: every month of delay costs a typical household £14 in extra gas and electricity. For the 8 million homes with EPC ratings of D or below, the cost of inaction is now quantifiable. The cap will be reviewed again in January, and if gas markets stay elevated, another rise is likely.

Homeowners on standard variable tariffs can switch to a fixed deal now, though fixed rates are currently 8–10% higher than the cap. The better long-term option is to invest in measures that decouple your home from gas prices entirely. Solar panels, a heat pump, and good insulation can cut annual bills to under £500, and insulate you from every future cap rise.