The average UK household spent £1,738 on electricity and gas in 2024, the second-highest year on record. That figure is not coming down on its own. The price cap, set by Ofgem every three months, still tracks wholesale gas prices, which jumped again this winter after a cold snap in Asia. The link between a power plant in Norway or a pipeline in Qatar and your direct debit is direct, and it is broken.
Now a group of eco experts, as reported by renewableenergymagazine.com, has told the government that the only durable fix is to lean harder into green energy, not as a climate gesture, but as a household bill strategy. The argument is simple: renewables have near-zero marginal fuel costs. Once a wind farm or solar array is built, the electricity it generates costs roughly 1p per kWh. Compare that to gas-fired power, where fuel alone costs 6-8p per kWh. The difference lands on your bill.
What this means for your electricity bill
Ofgem’s latest figures show that about half of a typical electricity bill is still driven by gas generation costs, because gas plants set the wholesale price for the entire market. This is the ‘merit order’ system, and it means that even when renewables are generating 40% of the grid’s power, your bill is still pegged to the most expensive gas plant running at that moment.
The eco experts’ argument is that the government can break this link by building more renewables faster, enough to push gas out of the price-setting position for more hours of the day. The Energy Systems Catapult has modelled that reaching 80% renewable generation by 2030 could cut wholesale electricity costs by 20-30%. For a typical household using 3,000 kWh a year, that would mean about £120-180 off the electricity portion of the bill. The catch is that network upgrades and grid connection delays are currently the biggest bottleneck. The government’s own target for 50 GW of offshore wind by 2030 is already looking tight.
Who qualifies, and who doesn’t
For homeowners, the immediate action is not to wait for the grid to change. It is to install your own generation. Solar panels on a south-facing roof in Manchester can generate about 3,500 kWh a year, enough to cover most of a typical household’s electricity use. The Smart Export Guarantee pays you for surplus power at about 5-15p per kWh, depending on your supplier. The Energy Saving Trust estimates that a typical 4 kW system costs £5,000-£6,000 and saves £300-£500 a year on bills. That is a payback period of 12-15 years, but with electricity prices likely to stay high, the savings compound.
Heat pumps are the other half of the equation. The Boiler Upgrade Scheme now offers £7,500 off the installation cost. A typical air-source heat pump costs £10,000-£12,000 installed, so the grant brings it down to £2,500-£4,500. Running costs are roughly 30% lower than a gas boiler, and the EPC rating improves by at least one band, often two if combined with solar.
But not everyone can access these benefits. Renters and leaseholders cannot install solar or a heat pump without landlord permission, which is rarely given. The government’s own data shows that only 1% of private rented homes have solar panels. For those households, the only lever is to push for the broader grid decarbonisation that the eco experts are calling for, and to switch to a time-of-use tariff like Octopus Flux or OVO Beyond, which can cut costs by shifting usage to cheap, renewable-heavy hours.
What the government must do now
The eco experts’ recommendation is not new, but the urgency is. The government’s Clean Power 2030 plan includes a target to double onshore wind and triple solar capacity by 2030. But planning reforms are still stalled in the House of Commons, and grid connection queues for new solar farms are running at 10-15 years. The National Grid’s own ‘joined-up Network Design’ report, published last year, identified £50 billion of necessary grid upgrades that have not been funded.
What this misses is the household-level effect. Every year of delay in building onshore wind in Scotland or solar in East Anglia is a year in which UK households pay an extra £150-£200 on their bills because gas is still setting the price. The government could also accelerate the rollout of community energy projects, which currently supply less than 0.5% of UK electricity despite having the potential to cover 10% by 2030, according to Community Energy England.
Homeowners can act now. Solar and a heat pump are the most effective combination for cutting bills and improving EPC ratings. The Boiler Upgrade Scheme is open until March 2028, but the £7,500 grant is on a first-come, first-served basis each year. For those who cannot install, the next best step is to switch to a renewable electricity tariff and sign up for a time-of-use plan. The grid is greening slowly. Your home does not have to wait.
Frequently Asked Questions
Yes, but the effect depends on how fast the grid decarbonises. The Energy Systems Catapult estimates a 20-30% drop in wholesale electricity costs by 2030 if the government hits its renewable targets. For a typical household, that means £120-180 off the annual electricity bill. Installing your own solar panels cuts your bill directly by £300-500 a year.
Yes. The Boiler Upgrade Scheme offers £7,500 off an air-source heat pump installation. Solar panels are not covered by that grant, but you can save up to £500 a year on bills and get paid for surplus power through the Smart Export Guarantee. Some local authorities also offer additional top-up grants for low-income households.
