Home » 
The July 2024 Energy Price Cap and Octopus Energy tariffs.
The Energy Price Cap went down today, 1st July 2024. Lots of people are having some respite from spiralling energy bills. Octopus Energy responded by lowering its tariffs. The reduction covered everything from its smart tariffs to its more traditional tariffs such as the Octopus fixed and flexible rates.
The obligatory day trip season has begun but we all know that holidays are short-lived and reality looms. The same sadly applies to energy bills, although if there’s a change of government who knows what’s on the horizon? Is there anything we can do to prepare for the winter?
Written by Sarah Chambers.
July Energy Price Cap 2024
Yipee, lower prices at last the news headlines read. A reduction of 7% is more than welcome. From 1 July 2024, the energy price cap for a typical household that pays by Direct Debit for their gas and electricty bills will go down from £1,690 to £1,568 per year. However, back in July 2021, it would have been £1,1138. That’s a difference of £430 a year.
Don’t get me wrong we are in a much better place than the summer of 2023. The price cap has been falling from astronomical heights but there’s a long way to go to get to pre-energy crisis rates and I worry for vulnerable customers who can’t pinch their belt in any further.
Will the October 2024 Energy Price Cap push Octopus tariff prices up?
This is where I take a big gulp of breath before considering winter prices. Octopus today has lowered its tariffs but will these prices continue to fall? Will we see an upward trend as we start turning on the central heating?
The Ofgem assessment period for the October 2024 Energy Price Cap has already started. Ofgem reviews wholesale energy between mid-May and August. The next price cap announcement will be on 27th August 2024. The new rates will come into effect on the 1st of October 2024 and so far it’s not looking that good.
Crystal ball energy predictions.
Cornwall Insight who makes predictions about the energy price cap published a report on the 28th of June 2024. They predict a 10% increase on the 1st of October. Their prediction has more weight now we are over a third of the way into the Ofgem assessment period. They previously predicted a 12% increase so things could change further depending on the wholesale energy market.
Octopus Energy tariffs which follow the price cap will change on the 1st of October. The Octopus Fixed tariff isn’t linked to the price cap. It doesn’t look at the past wholesale energy prices it looks at wholesale prices now and there’s an element of competition thrown in to attract customers to fix an energy rate so there is a little hope if you want to get ahead of the predicted upward curve and lock in a rate that provides more stability for your bills.
Octopus has promised not to keep the best deals for new customers. Ofgem has proposed energy companies could hide the best offers from their loyal customers but Octopus has made it clear that’s a game they do not want to play.
This is what Octopus has said;
-
Octopus commits to fair pricing for all customers and calls for a market focused on innovation, customer service, and efficiency, rather than ripping customers off with Del Boy pricing practices.
Further Ofgem proposals on the standing charge that may impact on energy prices.
Ofgem has also suggested that some of the standing charge costs should be moved to the unit price of energy. The standing charger costs don’t go away. Instead low users will be able to use less and pay less. I applauded trying to make the standing charge fairer but the cost will still exist. It will just be added to the price per kWh you pay for your energy. So if you use more you’ll pay more.
My concern with this particular Ofgem proposal is that vulnerable people who need the heating on or homes that are not energy efficient will end up paying more. There will be winners and losers. There doesn’t seem to be a proposal that gives me that much confidence. Families are going to continue to struggle with a resource that they may have previously taken for granted. This is another reason why an Octopus fixed rate at the moment is a good idea.
I can’t help myself sounding pessimistic about winter 2024/2025 energy prices. I worry about vulnerable homes where energy is now a luxury people cannot afford.
In my own home, I am doing all I can to electrify and generate my energy using solar panels. Now I can see how solar panels can dramatically reduce your energy bills and your reliance on the national grid I can’t understand why the government hasn’t done more to help roll out solar panels to more homes on limited income. It makes so much sense to me!
There may be hope post the 5th of July 2025. The general election may force the newly elected government to focus on energy bills. There have been suggestions of a social tariff for households on low incomes and ideas floated about moving part of the standing charge costs to general taxation. I think both sound like a good idea but how that will play out I am not sure.
General Election 2024 – What are the political parties proposing to make energy prices more affordable?
The NEA (National Energy Action) have scoured the manifesto pledges of the main political Parties. Here, are the energy pledges from the main political Parties:
- Maintain the energy price cap.
- Review and reform standing charges.
- Increase efficiency in local markets for electricity.
- Give households the choice of smart energy tariffs.
- Invest £6 billion in energy efficiency over the next three years to make around a million homes warmer.
- Fund an energy efficiency voucher scheme, open to every household in England, to support the installation of energy efficiency measures and solar panels, helping families lower their bills.
- Deliver a net zero electricity system by 2030.
- Invest an extra £6.6 billion over the next parliament, doubling the existing planned government investment, to upgrade five million homes.
- Establish the Warm House Plan to offer grants and low-interest loans to support investment in insulation and other improvements such as solar panels, batteries and low-carbon heating to cut bills.
- Ensure homes in the private rented sector meet minimum energy efficiency standards by 2030.
- Introduce a social tariff.
- Bring in new private rented sector standards of EPC C by 2028.
- Launch an emergency Home Energy Upgrade programme targeted at low-income households.
- Introduce a new subsidised Energy-Saving Home scheme with pilots to work out the most efficient combinations of support.
- A one-off windfall tax.
- Decouple electricity prices from the wholesale gas price.
- Eliminate regional differences in domestic energy bills.
How to get the cheapest Octopus Energy tariff ready for winter 2024.
Post 1st July we sit rather more relaxed knowing the heating is firmly off and the summer sun provides more opportunities to be outdoors but it’s a good time to consider your energy needs for the winter. Yes, the new government may swoop in to save us but I would rather be taking steps now just in case.
We will start to see articles, similar to the back-to-school pieces that roll out every year talking about the 3 steps you can take to keep your home warmer and reduce your energy bill. These articles are justified as small DIY jobs around the home can help keep your house a little warmer. They’ll also talk about using less energy and that’s not rocket science. If you use less you pay less. However, if you can have a smart meter there are lots more ways to reduce your energy bill.
You may have already switched off. You don’t want a smart meter and that’s fine. In these circumstances, I would advise considering taking the Octopus 12 months fixed now. You’ll pay 2% more until 1st October but with no exit fees, it’s not a risky strategy to save money. If Cornwall Insight are correct and the energy price cap rises by 10% come 1st October you’ll have made the right decision. The issue is they predict the increased price will last until the end of March 2025 so taking an Octopus fixed now makes sense. With no exit fees, there isn’t anything to lose.
Octopus Energy smart meter.
The Octopus Fixed tariff is a good way to try and bag the cheapest Octopus tariff for the winter. However, if you are open to a smart meter or already have one you can get offers and incentives that will help lower your household energy bill.
You can be on any Octopus tariff with a smart meter to get extra offers such as;
- Octopus Power Up if you live in the South East of England.
- Fan Club – Reduce electricty costs if you live near one of the Octopus wind turbines.
- Octopus Saving Sessions if you are happy to reduce your energy use in peak times to help the National Grid.
- Octopus rewards scheme with offers ranging from free cinema tickets to days out with the kids.
Octopus Smart Tariff where using more energy will save you money.
With an Octopus smart tariff, you will be breaking new ground. It might not be for everyone especially if you need the reassurance that a fixed price can offer but if you are prepared to hustle using more energy in your home at off-peak you can save money on your bill.
Customers’ bills are usually calculated by multiplying the prices per kWh of gas or electricity by the amounts used, plus the dreaded daily standing charge.
Tariffs are either fixed, the Octopus fixed is for one year or they can go up or down according to the energy price cap. But you can put your energy bill into reverse by getting paid to use energy. Then the calculation is different, Octopus will owe you a credit on your bill.
As an example, on Octopus Agile if prices go negative you get paid to use energy. Yes, you get paid for every kWh of energy you use. Taking energy off the grid and into your home goes beyond free it gives you a credit on your energy bill.
The only issue with Octopus Agile is that it can be unpredictable as the weather and demand on the National Grid play a part in reducing energy costs. If it’s very windy it’s game on. You know your rates around 4 pm for the next day and you can plan when you use appliances that use the most energy such as your washing machine and dishwasher. If you have a home battery even better, you’d fill it up at the cheapest rate possible and run your house from it for the rest of the day.
Are you prepared to change how you think about your energy use to save money?
So when you read news headlines which tell you the only way to save money on your energy bill is to use less energy that’s not quite true with Octopus. If you are prepared to take on an element of risk and change when you use energy you can get it cheaper or even make money using it. The issue is prices can also go up, especially at peak times between 4 pm and 7.30 pm.
So asking which is the cheapest Octopus Energy tariff can depend on how prepared you are to think about your home energy use and adapt to energy when it’s on offer because the wind is blowing or the sun is shining.
Summary getting ready for the winter Energy Price Cap.
Prices have fallen by 7% but competition is keeping the Octopus Fixed tariff at a very competitive 2% above the July Energy Price Cap. With a rise of 10% looming come October fixing your Octopus tariff makes sense. We can all hope that this prediction falls flat but it is still going to be a hard winter with prices higher than rates pre-energy crisis. Using tradional tariffs just trying to reduce your energy use isn’t enough as you get stung by the standing charge. You have to grab every offer and incentive to try and reduce your energy bill if you want to keep your bills down.
The summer is definitely over in terms of energy prices but with a little alternative thinking and some Octopus smart incentives you can try to keep your costs down.
About the author: I’ve been a happy Octopus Energy customer for 6 years.
This is me. I can be found on social media as Sarah_Go_Green and I have been an Octopus customer for 6 years. I’m featured on the Octopus website and their YouTube channel as a solar customer. I’ve been on the BBC news, published in the Telegraph for owning part of a wind turbine.
Recently I’ve been in Bloomberg simply for being an energy geek. I love renewable energy and make it my mission to reduce my family’s home energy bills while improving our carbon footprint. I’ve got around 7,000 followers across X and TikTok where I talk about electrifying my home and reducing my Octopus energy bill. I can help you too!
We all need to change how we use energy.
If anything good is to come out of this energy crisis I hope it’s that we have all stopped to consider how we can use less energy. Millions of people will be doing this in the coming months from pure need rather than desire. It is a miserable state of affairs. It highlights why we need energy security in the UK. We need to both produce and manage our energy better so we rely less on other countries for our gas supply.
Customer review.
My website is not managed or owned by Octopus Energy. It is just a website created by, Sarah Go Green. I’m a mum, a home energy geek and a very happy Octopus Energy customer.
You can read further independent Octopus Energy reviews on Trustpilot where 89% of customers give them 5 stars.
Posts by Sarah you may find of interest;
Other posts by Sarah you may find of interest;
Quick Links