Umair Gaines
Electricity prices in the UK have been a key concern for households, with prices soaring in 2022 due to the energy crisis and the Russian invasion of Ukraine. In 2023, the average cost of electricity per kilowatt-hour (kWh) in the UK was 27p, with the Energy Price Cap (EPC) set at £1,923 per year for a typical household. Prices have continued to fluctuate, with the EPC rising to £1,717 in September 2024 and an average cost of 24.5p per kWh. Regional differences, supplier tariffs, and payment methods also impact electricity costs, with direct debit typically being the cheapest option. As of May 2025, the average cost of electricity was 27.03p/kWh for a customer with typical usage paying by direct debit. Understanding unit rates and charges is essential for managing energy bills, and tools like smart meters can help consumers stay informed and in control of their energy spend.
| Characteristics | Values |
|---|---|
| Average cost of electricity per kWh in 2023 | 27p |
| Energy Price Cap (EPC) in 2023 | £1,923 per year for a typical household |
| Average electricity bill in the UK in 2021 | £764 |
| Average electricity bill in the UK in 2022 | £2,000 |
| Energy Price Cap from 1 January 2024 | £1,928 per year |
| Average unit price for electricity from 1 January 2024 | 22.36p per kWh |
| Daily standing charge for electricity from 1 January 2024 | 60.12p per day |
| Average cost of electricity per kWh in 2024 | 24.5p |
| Energy Price Cap from 1 October 2024 to 31 December 2024 | £1,717 per year |
| Electricity prices in Great Britain in October 2024 | £89 per megawatt-hour |
| Average price of electricity per kWh from 1 July 2025 to 30 September 2025 | 25.73p per kWh |
| Average electricity unit rate in the UK from 1 July 2025 to 30 September 2025 | 25.73p per kWh |
| Average electricity bill in the UK from 1 July 2025 | £1,720 per year for a typical household |
| Average cost of electricity in the second quarter of 2025 | 27.03p per kWh |
| Current price of electricity in the UK from 1 July 2025 to 30 September 2025 | 25.73p per kWh plus 51.37p per day (daily standing charge) |
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What You'll Learn
Energy price cap
The energy price cap is set by Ofgem, the independent regulator for the energy market in Great Britain. It limits how much suppliers can charge a household on a prepayment or standard variable tariff for the units of energy they use. The price cap is updated every quarter (in January, April, July, and October).
The energy price cap doesn't limit the total bill. Instead, it limits the unit cost of the energy used. So, the more energy a household uses, the higher the bill will be. The price cap also includes daily standing charges, which are the fees charged to be connected to the energy supply. These fees are set by each energy supplier and can vary depending on the location in England, Scotland, or Wales.
The energy price cap was introduced in 2019 to protect consumers and covers around 65% of households. The energy crisis in 2021, caused by a surge in energy demand as countries lifted Covid-19 lockdowns, led to soaring energy prices. The conflict between Russia and Ukraine also constrained supplies and caused wholesale energy prices to spike.
The energy price cap for electricity was 27p per kWh in 2023, with the Energy Price Cap (EPC) set at £1,923 per year for a typical household. The EPC rose to £1,717 as of September 2024, with the average cost of electricity per kWh at 24.5p. The current energy price cap, in place from April to June 2025, is set at £1,849 per year. Ofgem cut the price cap by 7% in May 2025, resulting in a new cap of £1,720 per year for average electricity and gas usage.
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Average electricity unit rate
The average electricity unit rate in the UK is a dynamic figure that has changed over the past few years. In 2023, the average cost of electricity per kilowatt-hour (kWh) was 27p. This figure was influenced by various factors, including the wholesale cost of energy, operational costs for suppliers, and government policies. The Energy Price Cap (EPC), a policy introduced to protect consumers from being overcharged, played a significant role in shaping the cost of electricity during this period.
In 2024, the average electricity unit rate saw some fluctuations. As of September 5, 2024, the average cost of electricity per kWh was 24.5p, with the EPC set at £1,717 per year for a typical household. This represented an increase from the previous cap of £1,568 that was in effect from July to September 2024. The energy market remained volatile, and forecasts suggested that energy prices would continue to face upward pressure in 2025.
Moving into 2025, the average electricity unit rate has continued to evolve. From July 1 to September 30, 2025, the average price of electricity per kWh is expected to be 25.73 pence for a typical household that pays by Direct Debit. This price cap, set by Ofgem, aims to control per-unit rates rather than total bills. It's important to note that electricity prices vary by region, with some areas paying more due to local network and infrastructure costs.
Understanding the average electricity unit rate is crucial for consumers to make informed decisions about their energy usage. The total cost of electricity bills depends on individual energy consumption, and consumers can take control of their energy spend by monitoring their usage, reviewing tariffs, and adopting energy-saving habits. With the cost-of-living crisis still impacting many households in the UK, staying informed about the average electricity unit rate and managing energy usage effectively can help alleviate financial burdens.
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Wholesale energy costs
The wholesale cost of energy is one of the factors that influence the average electricity cost per kilowatt-hour (kWh) in the UK. The other factors include operational costs for energy suppliers and government policies.
The Energy Price Cap (EPC) was introduced to protect consumers from being overcharged. However, it's important to note that the cap applies to the unit cost per kWh, not the total amount paid. Therefore, households with higher energy usage would pay more than the capped amount.
In 2023, the UK experienced notable changes in its energy market. The cost of electricity per kWh was 27p, with the Energy Price Cap (EPC) set at £1,923 per year for a typical household. The average electricity bill in the UK rose from £764 in 2021 to nearly £2,000 in 2022. The energy price cap for electricity was reduced in 2024, and the average unit price for electricity became 22.36p per kWh. The price cap for electricity rose by approximately 9.6% from July to September 2024, with the EPC set at £1,717 a year for a typical household.
As of May 2025, the average cost of electricity is 27.03p/kWh for a customer with typical usage paying by direct debit on a default tariff. From 1 July to 30 September 2025, the average price of electricity per kWh will be 25.73 pence for a typical household that pays by Direct Debit.
The UK was one of the countries with the highest electricity prices worldwide during the energy crisis. Prices began to stabilize in 2023 and 2024, almost to pre-energy crisis levels. The use of nuclear, wind, and bioenergy for electricity generation has been increasing recently.
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Regional price differences
The price of electricity in the UK is determined by various factors, including the wholesale cost of energy, operational costs for suppliers, and government policies. While the Ofgem price cap controls per-unit rates, it does not guarantee a low bill as the total cost depends on energy consumption, region, and payment method.
The method of payment can also influence costs, with direct debit typically offering the best value, while credit and prepayment plans may result in higher charges. Smart meters and tariff comparisons can help consumers manage their energy spend and identify opportunities to reduce costs.
The energy market's volatility has led to fluctuating electricity prices, with the average cost per kWh in the UK rising from 27p in 2023 to 28.6p in January 2024, and then decreasing to 24.5p in September 2024. As of Q3 2025, the average price per kWh is expected to be 25.73p for a typical household paying by direct debit.
Understanding these regional price differences and staying informed about the evolving energy market can empower consumers to make informed decisions, manage their energy usage, and potentially reduce their electricity expenses.
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Cost-of-living crisis
The UK has been experiencing a cost-of-living crisis, with energy prices soaring and putting pressure on households. In 2023, the average cost of electricity per kilowatt-hour (kWh) in the UK was 27p, with the Energy Price Cap (EPC) set at £1,923 per year for a typical household. This was a significant increase from 2021, when the average electricity bill in the UK was £764. The wholesale cost of energy, operational costs for suppliers, and government policies all influence the price of electricity.
The energy price cap is reviewed and updated every three months to reflect changes in energy costs and inflation. While this is intended to ensure fair pricing, some households may still pay more or less depending on their circumstances and energy usage. The EPC was expected to rise in early 2024 due to seasonal fluctuations in demand but instead decreased in January 2024, with a further reduction in July 2025.
The cost-of-living crisis has had a significant impact on consumers, with many adults in Great Britain reducing their fuel usage due to rising costs. According to a survey, around 4 in 10 adults found it challenging to afford energy bills. The government has offered support through schemes like the Winter Fuel Payment and a £144 million discretionary fund for local authorities.
While inflation rates have decreased from their peak during the cost-of-living crisis, prices are still rising, albeit at a slower pace. This has resulted in families struggling with debt and sacrificing essentials. Economists predict that prices will eventually stabilise, and real wages should catch up over time.
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Frequently asked questions
The average cost of electricity in the UK has been steadily increasing over the past few years due to various factors, including limited gas reserves and high demand for liquified natural gas from Asia. In 2023, the average cost of electricity per kilowatt-hour (kWh) was 27p. As of 2025, the average cost has risen to around 25-27p per kWh. However, it's important to note that prices vary by region, with some areas paying more due to local network and infrastructure costs.
The EPC is a cap on the maximum amount that suppliers can charge households for each unit of gas and electricity. While it provides some protection for consumers, it doesn't guarantee a low bill. Your total cost depends on how much electricity you use, where you live, and how you pay (direct debit, credit, or prepayment). The EPC is reviewed and adjusted regularly, with the most recent cap set at £1,720 per year for a typical household from July to September 2025.
Understanding how unit rates and standing charges work is essential for managing your energy bills. Using tools like smart meters, regularly reviewing your tariff, and adopting energy-saving habits can all help reduce your electricity spend. Additionally, direct debit is typically the cheapest way to pay, so consider switching to this payment method if you haven't already.
