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Relationship Between the Energy Price Cap & EWI Savings

The energy price cap has been a contentious issue in the UK for several years. Various worldwide events, like the war in Ukraine and the resultant energy shortage, have greatly impacted the prices of imports. These increases are consequently passed on to consumers. The energy price cap is designed to limit the amount energy companies can charge. However, these costs have risen to exorbitant levels during the past two years. Is there a solution? We would argue that there is, and the answer is insulation. EWI savings can knock up to £1,000 off your energy bills.

Progression of the energy price cap

The energy price cap is the maximum amount energy suppliers can charge consumers for each unit of energy and standing charge. It is reassessed constantly and changed in 3-month intervals. The current intervals place new price caps in January, April, July, and November.

Ofgem is the regulator of the energy industry in the UK. As such, they calculate and dictate the level of the price cap for each interval. The calculation is dependent on a multitude of factors, such as the wholesale cost of energy, network costs, policy costs, operating costs, and prepayment meter costs.

As the independent regulator, Ofgem reserves the right to offer exemptions for energy companies. These exemptions depend almost entirely on the company’s efforts to generate and supply green energy to customers. Three suppliers have a permanent exemption from the price cap: Ecotricity, Good Energy, and 100Green.


Ecotricity is a pioneering green energy company in the UK, founded by Dale Vince in 1995. It stands out for its early adoption and promotion of renewable energy solutions, being Britain’s first company to offer green electricity. It produces energy primarily through wind and solar power and has introduced biogas to its portfolio. The company also ventured into the electric vehicle market with initiatives like the Electric Highway, a network of electric vehicle charging stations. As of 2023, it continues to focus on sustainable energy solutions and has expanded into other eco-friendly projects.

Good Energy

Good Energy is a UK-based renewable energy company that generates and sells electricity sourced exclusively from renewable sources like solar, wind, hydro, and biomass. Founded in 1999, it was one of the early adopters of renewable energy tariffs for residential and commercial customers. Good Energy is committed to combating climate change by supporting local, smaller-scale renewable projects and offering services to increase the accessibility of green energy.


100Green is a company that offers 100% green & renewable energy and has, since 2001, offered 100% green gas. They also do not offset any carbon due to not needing to. Their energy is sourced green exclusively; therefore, it does not require offsetting.

The Energy Price Guarantee and the rise and fall of the energy price cap

Another factor that has impacted the UK market was the introduction of the Energy Price Guarantee. This scheme is essentially another price cap introduced by the UK government. It limits the amount a consumer pays to £2,500, irrespective of the price cap. Due to the figures rising significantly above that figure, the government supplemented payments to energy companies.

  1. Ofgem’s price cap level rises to £3,549 in November 2022. The government responded by introducing the Energy Price Guarantee, which subsidises bills.
  2. Ofgem’s price cap continues to rise in the next two intervals to £4,279 and drops slightly to £3,280. Both figures are still significantly above the Energy Price Guarantee; therefore, subsidies continue.
  3. The fall in the Ofgem price cap is due to falling wholesale energy prices.
  4. Wholesale energy prices fall far enough in the first two quarters of 2023 to drop the price cap below the Energy Price Guarantee.

EWI savings against the price cap

External wall insulation is a fantastic way to improve your home’s energy efficiency. In essence, EWI is a large blanket for the external walls. The presence of this uninterrupted thermal envelope reduces the presence of thermal bridges. Thermal bridges act as highways for expensively produced heat to escape. Therefore, by eliminating those thermal bridges with EWI, the heat is kept inside your home. As such, you don’t need to turn your heating on as often or for long periods. The retention of heat is due to the increased thermal mass of your walls.

Savings can vary significantly depending on the current cost of energy and the thickness of insulation. The Energy Savings Trust states that EWI savings can be anywhere from £700 – £1,000 annually. With a fluctuating price cap, that presents a significant saving.

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