Energy bills are on everyone’s mind. Even though wholesale energy prices have eased from the extreme highs seen in 2022–2023, many households in the UK are still facing bills that are significantly higher than they were before the energy crisis, and future increases are likely*.
So, what’s driving this? And why does investing in solar panels, and batteries, make financial sense today and for the years ahead?
Energy bills aren’t just about the price of electricity anymore
When people think of energy costs, they often think of how much electricity costs per unit. But that’s only part of the story.
UK household energy bills include:
- Wholesale energy costs: the actual price paid for electricity generation
- Network and infrastructure costs: funding upgrades to electricity wires and poles
- Policy and system costs: levies to support energy efficiency, renewables, heating schemes and other government programmes
- Standing charges: daily fixed costs that don’t change much with usage
Even if the wholesale price of electricity stays relatively stable, the non-commodity costs, network and policy charges are rising because of major infrastructure and clean-energy investment across the UK. This is a positive sign that we are moving towards a green economy, however, there is an inevitable cost to the end user in doing so.
Bills are forecast to rise through to 2030
Several independent analyses and industry projections show that:
- Household energy bills are likely to trending upward over the coming decade, even with wholesale prices lower than recent peaks **
- Ofgem-approved investment plans for electricity networks alone are expected to add to household costs as the upgrade bills are recouped through energy charges
- The government and industry are still targeting a cleaner, more domestic energy system, but the costs to reach that system are passed back into bills in the near term.
What that means is: even if energy markets calm, homes are likely to pay more because of the way the energy system is paid for under the current framework.
Home solar is a hedge against rising energy charges
Solar panels generate electricity where it is used: on your roof, for your home.
Every kilowatt-hour you generate yourself is a kilowatt-hour you don’t buy from your supplier. That means you lower not just your exposure to wholesale energy price movements, but also the network and policy charges that are applied to every unit you buy from the grid.
In other words:
- You reduce your reliance on grid electricity.
- You protect yourself against year-on-year increases in energy charges.
- You keep more of what you produce, and pay less of what you don’t.
For many households, that translates into much smaller bills over the long term compared with staying fully grid-dependent.
Batteries help you make the most of your solar and avoid peak-time costs
Battery storage isn’t right for every home but where it does make sense, it offers even more control.
A battery lets you:
- Store excess solar power generated during the day
- Use that stored power in the evenings and mornings
- Avoid buying expensive grid electricity at peak times
- Reduce use of grid power when standing charges and time-of-use costs are highest
So solar cuts the amount you import from the grid and a battery cuts when you import it.
Energy efficiency + generation = long-term resilience
Generating your own electricity doesn’t just reduce bills. When combined with good insulation, efficient heating and appliances, your home becomes less vulnerable to future price increases which based on current forecasts and infrastructure spending plans are likely to continue beyond 2025 and into the start of the next decade.
Rather than waiting to see how bills evolve, investing in clean energy solutions gives you control and predictability in an uncertain energy landscape.
The bottom line
With structural pressures pushing parts of household energy bills upward over the next decade, generating your own electricity, especially if paired with battery storage where it’s cost-effective, is a smart way to reduce your exposure to future price rises, lower your ongoing costs, and build resilience into your home’s energy supply.
If you’d like to understand how solar and batteries can reduce your household bills, please call us on 01803 200666 or email our Domestic Technical Salesperson, Rowan Hopkins – rowan@bloomrenewables.co.uk
Article sources:
*https://www.instituteforgovernment.org.uk/explainer/domestic-energy-bills
**https://www.edfenergy.com/media-centre/rising-energy-bills-can-anything-be-done-absolutely
*** https://careaccountancy.co.uk/uk-households-to-see-higher-energy-bills-by-2030