The July energy price cap is set to rise by £63, taking the typical annual bill to £1,823. That is the third increase in a year, and it comes as wholesale gas prices remain stubbornly high. For the average UK household, that means another squeeze on budgets already stretched by inflation.
Cornwall Insight, the consultancy whose forecasts are closely watched by the industry, released its final July price cap forecast on Tuesday. As reported by Cornwall Insight, the increase reflects higher wholesale gas costs and rising network charges. Ofgem will confirm the actual cap on 27 February, but the direction of travel is clear.
Why the cap is rising, and what it costs you
The price cap limits what suppliers can charge per unit of energy, not the total bill. So a household using 12,000 kWh of gas and 2,900 kWh of electricity, the typical usage for a 3-bed semi, will pay £1,823 from July. That is up from £1,760 now, and £1,690 a year ago.
Ofgem attributes the rise to three factors: wholesale gas prices (up 12% since January), network costs (about £24 per household), and policy costs linked to renewable subsidies. The catch is that households on standard variable tariffs, roughly 11 million homes, have no choice but to pay it, unless they switch to a fixed deal. But fixed deals are scarce and often only marginally cheaper.
What this misses is the opportunity to cut usage. Every kilowatt-hour saved is one not subject to the cap. That is where insulation, draught-proofing, and efficient heating come in.
How energy upgrades can beat the cap
The average semi-detached house loses 35% of its heat through the walls and 25% through the roof, according to the Energy Saving Trust. Adding cavity wall insulation (cost typically £2,500–£4,500) can save £300 a year on heating. Loft insulation (cost typically £300–£600) saves another £200. Combined, that more than offsets the July rise.
Heat pumps are a bigger investment, typically £7,000–£13,000 after the £7,500 Boiler Upgrade Scheme grant, but they cut heating bills by 30–50% compared to a gas boiler. For a household spending £1,000 on gas heating annually, that is £300–£500 saved each year.
Solar panels (typically £5,000–£8,000 for a 4 kW system) can reduce electricity bills by 50–70%, or about £400–£560 a year at current rates. With the Smart Export Guarantee paying for surplus power, payback periods are now 10–15 years.
EPC impact and grant deadlines
These upgrades also improve your Energy Performance Certificate (EPC) rating. A D-rated home can move to C or B with cavity wall insulation, loft insulation, and a heat pump. That matters because from 2025, landlords cannot let properties below EPC C, and homeowners selling with a low rating face a discount of up to 14% on the sale price.
Grants are available now but deadlines loom. The Boiler Upgrade Scheme runs until March 2028, but funding is allocated on a first-come, first-served basis. The ECO+ scheme offers free insulation for low-income households and partial funding for others, but applications close when budgets are exhausted, which could be by summer 2025.
Households on standard variable tariffs can apply through gov.uk from 4 November. Eligibility closes on 31 March 2027.
Frequently Asked Questions
No, the price cap only applies to standard variable tariffs. If you are on a fixed-rate deal, your unit rates and standing charges are locked until the fix ends. But check your exit fees before switching.
Check your EPC rating online at gov.uk. Homes rated D or below typically qualify for ECO+ or local authority schemes. Contact your energy supplier or visit the Energy Saving Trust website for postcode-specific options.
