From 1 October, households on variable tariffs paying by direct debit in England, Scotland and Wales pay unit rates and standing charges that work out at around 34p per kWh with a standing charge of 46p per day1. The Energy Price Guarantee (EPG), announced on 9 September, replaced the previously announced price cap of £3,549, or 52p per kWh, that had been due to take effect from the same date1.
The EPG is a two-year guarantee of £2,500 for a "typical household" paying by direct debit1. The guarantee caps the price of a single unit of energy rather than a household's total bill, so what a home actually pays depends on how much it uses1. The 34p per kWh rate is an increase on the then current average unit rate of 28p per kWh, but well below the 52p per kWh that had been announced in August1.
"From 1 October, for customers paying for variable tariffs by direct debit in England, Scotland and Wales, unit rates and standing charges will work out at around 34p per kWh with a standing charge of 46p per day"
The change also affects the cost of running an electric car charged at home. Which? calculated the annual cost of 8,100 miles of driving, the average annual mileage reported by consumers in its 2022 car survey, at both the old and new unit rates1.
| Car class | Efficiency (mi/kWh) | Cost at 28p per kWh | Cost at 34p per kWh | Increase |
|---|---|---|---|---|
| City car | 3.53 | £643.60 | £781.39 | £137.79 |
| Small car | 3.33 | £683.76 | £830.14 | £146.38 |
| Medium car | 3.12 | £732.08 | £889.09 | £157.01 |
| Compact/small SUV | 3.06 | £753.54 | £915.24 | £161.70 |
| Mid/large SUV | 2.65 | £864.76 | £1,049.97 | £185.21 |
Source: Which?,1. Costs are for 8,100 miles.
Had the 52p per kWh cap gone ahead, Which? found that several car classes would have been cheaper to run on diesel than to charge at home. Under the EPG, it reported that electric cars across all classes remain cheaper than diesel equivalents1. For a medium car, the average electric model would have been £158 more expensive than the same sized diesel under the abandoned cap, but saves over £300 a year compared with diesel under the EPG1.
Public rapid charging is a separate matter. Which? reported that some networks using high-powered chargers of 50 to 350kW charge in excess of 60p per kWh, and that paying more than 47p per kWh means paying more than an equivalent petrol or diesel car1. Electricity at home is subject to 5% VAT, while public charging networks have to charge 20% VAT1. Instavolt raised its rapid charger prices to 66p per kWh as of 15 August, and states that with 5% VAT that cost would be 58p per kWh1.
Why it matters for households
The unit rate and standing charge are the two numbers that determine what a home pays, and both changed on the same day. A standing charge of 46p per day is charged regardless of how much energy is used, so it applies to a property even in a period of low consumption. The unit rate applies to every kilowatt hour consumed, which means the size of a bill tracks usage rather than the headline £2,500 figure, which describes a typical household only1.
For a home with an electric vehicle, the gap between charging at home and charging on the public network widened. At 34p per kWh, home charging remained cheaper than petrol or diesel for every car class Which? tested, while public rapid charging above 47p per kWh did not1. That difference turns on where the electricity is bought and the VAT rate applied to it, not on the car.
The guarantee runs for two years from its announcement1. It replaced a cap that had already been set at a higher level, so the rates in force from 1 October are lower than those that had been expected in August1.
What happens next
The EPG was announced as a two-year measure1. No further changes to the unit rate or standing charge beyond that period are reported in the source material.