Are Energy Prices Going Down: 2025 Energy Price Prediction
Are energy prices going down? It’s a pressing question for households and businesses facing rising energy costs. Many wonder when do energy prices go down and whether relief is on the horizon. While historical trends suggest that prices decline when global supply stabilizes, various factors make the outlook uncertain.
This blog unpacks current trends in energy prices, standing charges, and the key drivers behind pricing changes. We’ll also explore the future outlook, will gas and electric prices go down, and share practical tips to help reduce your energy bills. Keep reading to stay informed and make smarter choices for your home.
Will Energy Prices Go Down in the Near Future?
Since the summer of 2021, energy prices, including gas, electricity, and oil, have steadily increased as global economies reopened following pandemic-related lockdowns. With Ofgem reviewing the price cap every quarter, many people are asking: Are energy prices likely to go up or down?
Unfortunately, prices are expected to rise again. From April 1, energy bills are set to increase by an average of 6.4%, pushing the typical dual fuel bill to £1,849 per year. This follows earlier increases of 1.2% in January and 10% in October 2024, largely due to ongoing volatility in wholesale energy markets.
While the energy price cap helps limit the rate suppliers can charge per unit, it doesn’t cap your total bill, how much you pay still depends on your actual usage. Fixed-rate deals aren’t affected by quarterly cap changes, making them a potentially safer option for those seeking more predictable energy costs.
Should I Fix My Energy Prices?
You’ve got two main types of energy tariffs to choose from in the UK: a standard variable tariff and a fixed tariff. A standard variable tariff means your rate changes with the energy market—it can go up or down, depending on the energy price cap set every three months. A fixed tariff, on the other hand, locks in your unit rate for a set contract period, offering stability and predictability.
So, should you fix your energy prices now? As of April 1st, 2025, the energy price cap has just increased by 6.4%, with both gas and electricity unit rates rising (as shown in the table). Fixing your tariff now could protect you from any further increases in the coming months. However, fixed deals aren’t covered by the cap, and if electricity prices go down in the future, you could be stuck paying more. You might also face exit fees if you switch before your contract ends. If you’re asking will electricity prices go down, the honest answer is: no one knows for sure.
What Factors Influence Energy Prices?
Energy prices are shaped by various factors, from global market conditions to technological advancements in renewable energy. Understanding these influences can help consumers anticipate price changes and make informed decisions about their energy consumption:
Global Market Conditions
Geopolitical tensions and supply chain disruptions can limit energy availability, leading to price hikes. Conflicts in oil-producing regions or extreme weather events affecting infrastructure result in sudden cost increas
Government Policies & Regulation
Energy prices fluctuate based on government interventions like price caps, taxes, and subsidies. Policies supporting renewables or imposing carbon levies can either drive costs down or push them higher.
Renewable Energy Expansion
Growing reliance on clean energy, such as wind power or solar energy, impacts price trends. While renewables reduce dependency on fossil fuels, the challenge of integrating them into the grid still affects electricity cost stability.
A key question in this expansion process is how reliable solar energy is. As solar power becomes more integral to the energy mix, ensuring its consistent and reliable supply is essential for maintaining grid stability and controlling costs.
Seasonal Demand
Energy use spikes in colder months due to heating needs, pushing prices up. Milder seasons, with lower demand, can lead to slight cost reductions.
How to Reduce Your Energy Bills?
How to reduce energy bills is a growing concern, especially with uncertainties about when will energy prices go down. While prices remain volatile, there are several practical ways to manage and lower your energy costs effectively:
Switch to Renewable Energy
Switching to renewable energy, like using a solar generator, can significantly cut your electricity bills. By storing solar power, you avoid relying on the grid during peak hours. A reliable option like the EcoFlow DELTA Pro 3 Portable Power Station quietly powers major appliances and offers expandable capacity to match your needs. This solar battery is great for both everyday use and backup during outages. Plus, its fast charging and easy setup make it a hassle-free way to take control of your home’s energy use.
Optimize Energy Usage
Implementing energy-saving measures such as installing smart meters, using energy-efficient appliances like LED lights, adjusting your thermostat, and sealing drafts around windows and doors can significantly reduce energy consumption and lower utility bills.
Monitor Your Bills
Tracking your average monthly electric bill helps identify usage patterns and areas where you can cut costs. It ensures you're not overpaying due to incorrect charges or inefficient energy habits.
Explore Government Support
Government programs, like the Warm Home Discount and Fuel Direct Scheme, provide financial relief to eligible households struggling with rising energy costs. Checking for available grants and subsidies can reduce your overall expenses.
Get Help from Your Energy Supplier
If you're struggling with energy bills, contact your supplier. Under Ofgem rules, they must help by reviewing payments, offering breaks, extensions, hardship funds, and energy-saving advice. Some suppliers, under the Energy UK Vulnerability Commitment, also provide free home upgrades like insulation, new boilers, or energy-saving items like electric blankets.
Conclusion
So, are energy prices going down? Due to market volatility and fluctuations in global events, energy prices remain unpredictable. High reliance on gas imports and ongoing uncertainties continue to elevate costs. Whether prices decrease further will depend on future policy decisions, global developments, and the expansion of renewable energy. In the meantime, households can reduce their bills by adopting energy-efficient practices and exploring alternative power solutions.
FAQs
Why is UK electricity so expensive?
UK electricity is expensive due to its high reliance on gas imports, which causes price volatility. Costs for grid maintenance, infrastructure updates, and policy-driven charges, including renewable energy subsidies, are also passed on to consumers, making electricity more expensive for households and businesses in the UK.
What are the predictions for gas and electricity prices?
Experts suggest prices stabilize but do not significantly decrease unless there are significant changes in supply, government policies, or renewable energy adoption.