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What You Need to Know About 2022 UK Energy Price Increase

by Northern Life


Ofgem raises the cap on default energy tariffs to a historical high of £1,971.

It’s no secret that all of us hoped that 2022 would be the year energy prices returned to normal. But with the Office of Gas and Electricity Markets raising the energy price cap by 54%, it looks like the situation we find ourselves in will only get worse.

When Will the Default Tariff Change Take Effect?

The changes to the energy price cap will take effect on April 1, 2022. Starting from this date, energy providers will be able to raise their prices up to the new ceiling.

This is the second such price rise in the last 12 months. In October of last year, the prices were raised from £1,042 to £1,277. And now the price has been raised a further £693 to a historically-high £1,971.


Why Was the Default Energy Tariff Changed?

The move was prompted by a fourfold increase in the free market price of energy. Its purpose is to help energy suppliers stay afloat in challenging times.

Over two dozen energy suppliers have closed down in the last two years because of this. As the government wants to avoid further closures at all costs, Ofgem didn’t really any other choice but to raise the price cap drastically


How Will The New Price Cap Impact British Families?

As has been widely reported, millions of British families are now finding themselves on the brink of energy poverty. There is a very real possibility that many in the UK will have to skimp on food and other necessities to avoid being unable to pay their gas and electric bills.

In order to help UK families, the Treasury is offering a one time £200 discount to all British families who request it. The family would then have to repay this discount in five annual instalments of £40.


How Are People Dealing With the Price Hike?

In order to take energy suppliers out of their heating bills entirely, some people attempt to save on heating by installing traditional wood-burning stoves. Others utilize the kettle trick and other Tik Tok lifehacks to save on electricity costs. And others still are contemplating the feasibility of installing solar panels in our climate.


Belt Tightening

It is projected that almost 60% of all UK households will have to face the so-called “heat or eat” dilemma, having to economise on food items in order to be able to afford to pay their energy bills.

And this doesn’t mean simply going to restaurants less often or avoiding takeout. According to data published in the Guardian, nearly 10% of UK households currently experience food insecurity due to the energy crisis. Food insecurity is defined as having to skip or more meals throughout the day, or even not eating for the entire day.


Energy Saving Tricks and Lifehacks

With energy bills being what they are, one way millions of people are coping with the current situation is by finding new and creative ways to use less energy.

Unless you’ve been living under a rock, you’ve no doubt seen the kettle trick on Tik Tok. According to user scott8bits, the average UK household can save upwards of £329 on electricity every year by utilising the lifehack. The trick consists of filling up your kettle fully, using what you need, and pouring the rest into a thermos for later. So, instead of firing up your kettle every time you want to make a cup of tea, you fire up once in the morning and use that water for the rest of the day.

Other popular lifehacks include:

  • Unplugging your electrical devices when they’re not in use so that they don’t draw phantom power.
  • Putting reflective panels behind your radiator to avoid heat loss.
  • Covering your floors with carpets for the same reason.
  • Lowering your heating to the minimum when you’re outside the house.
  • Using your washing machine and/or dishwasher at night to take advantage of lower electricity costs (only works on Economy 7 and Economy 10 tariffs).


Transitioning Back to Wood Heating

Moving on to more extreme measures, thousands of Britons are rediscovering traditional wood fuels. And with the prices of both gas and electricity increasing almost 200% over the course of the last two years, it’s hard to blame them.

Warming your home with firewood or wood briquettes has always been noticeably cheaper than doing so with gas or electric heat, but this affordability always came at the price of convenience. Wood burning stoves need to be fired up in the morning, logs need to be added to the fire periodically, and the entire appliance needs to be cleaned at least once a day. But now that gas and electric heating is becoming prohibitively expensive, the prospect of buying and installing a wood stove is becoming more tempting than ever.

It has been calculated that the savings from transitioning to wood heat can cover the upfront costs of purchase and installation in just a single heating season. However, this doesn’t take into account the possibility of a wood fuel price increase. What’s more, buying and installing a wood burner is actually quite expensive. A typical, one burner setup can cost you between £3,000 and £4,000.


Installing Solar Panels

With the prices of solar panels dropping rapidly and the cost of electricity rising even faster, rooftop solar panels are becoming harder and harder for homeowners to ignore.

It has been calculated that a 10kW solar system installed in Sheffield will generate around 5993kWh worth of electricity per year, accounting for all possible losses and the local climate. While this isn’t anywhere near what can be achieved in California or other sunny parts of the world, it is still more than enough power for an entire house.

However, it’s not all sunshine and rainbows. As you’ll be selling excess energy during the sunny parts of the day to the grid for a low sell price and buying electricity at night for a higher buy price, you’ll still end up paying your energy supplier (not vice versa) despite generating more energy than you consume. The only way to get around this would be to buy an industrial battery and go entirely off the grid.

Based on current prices, a 10kW solar system will cost you between £6,000 at the very low end and £12,000 at the high end, with 10,000 pounds being the Goldilocks zone of the cost/quality ratio.