On 27 February 2023, Ofgem announced that the price cap would decrease from £4,279 to £3,280 from 1 April 2023. The April 2023 Ofgem energy price cap is set to decrease, but the government’s decision to reduce the Energy Price Guarantee (EPG) discount makes solar PV a wiser investment opportunity than ever before. In this blog, we’ll explain how the combination of the energy price cap decrease and the reduced EPG discount affects energy costs, and why solar PV is an attractive investment opportunity for homeowners and businesses.
What is the April 2023 Ofgem Energy Price Cap?
The Ofgem energy price cap is a government-imposed limit on the amount that energy suppliers can charge their customers for standard variable tariffs. The price cap is reviewed twice a year, with the next adjustment scheduled for April 2023.
According to Ofgem, the April 2023 price cap will decrease, from £4,279 to £3,280. This may seem like good news for consumers, but it’s important to note that energy bills are still set to increase for many households across the UK.
What is the Energy Price Guarantee (EPG) Discount?
The EPG discount is a financial limitation on what UK households pay for their energy. It was put in place by the government in October 2022 and is applied to the price cap rates to bring energy levels down to the governments promised levels. Essentially the government is subsidising the cost of energy for UK households. The EPG discount currently ensures households pay no more than £2500 for your typical household but this is set to increase from April 2023 to £3000.
How Does the Reduction of the EPG Discount Affect Solar PV Investment?
The government’s decision to reduce the EPG discount makes solar PV a wiser investment than ever before. With the EPG discount being reduced, and subsequent rise in annual energy bills – it’s now more important than ever for homeowners and businesses to generate as much of their own electricity as possible, rather than relying on the grid. This is where solar PV comes in.
Solar PV systems use photovoltaic cells to convert sunlight into electricity, which can then be used to power appliances, lighting, and other electrical devices. By generating your own electricity, you can reduce your reliance on the grid and protect yourself against rising energy costs.
Investing in a solar PV system can help to reduce energy bills, as well as carbon emissions, and provide energy security during power outages. And with the cost of solar PV technology falling, the financial returns from solar PV can be very attractive over the long-term.
How to Get Started with Solar PV
If you’re interested in investing in solar PV, the first step is to find a reputable installer who can help you to design and install a system that meets your specific needs. Look for installers who are accredited by the Microgeneration Certification Scheme (MCS), as these organisations ensure that installers meet high standards of quality and customer service.
Your installer will be able to advise you on the most suitable system size and type for your property, as well as the expected energy output and financial returns. At Spectra Solar we pride ourselves on educating our customers about Solar and the best options for them. Get in touch with us today and start your journey!
Conclusion
While the April 2023 Ofgem energy price cap decrease and the reduced Energy Price Guarantee (EPG) discount may seem like setbacks for renewable energy, investing in solar PV is still a wise choice for homeowners and businesses who want to reduce their energy bills and generate their own clean, renewable energy. By working with a reputable installer like Spectra Solar, you can design and install a solar PV system that meets your specific needs, and provides long-term financial and environmental benefits.