Together with the UK energy crisis and inflation, the cost of living has skyrocketed; leaving many worrying if they will be able to afford their bills at the end of the month. This February, the energy price cap will increase again; with a projection that the second rise in October could drive bills up by more than 75% above today’s energy bills.

Finding a solution to the rising energy bills whether it be for a home or business is essential. But what is the ultimate solution? We say renewable energy, read below to discover why.

What is The Energy Price Cap and Why Is It Increasing?

The energy price cap was introduced in 2019. It primarily functions in favour of the customer to prevent them from being overcharged by their energy supplier. The cap sets a maximum amount of what energy suppliers can charge their customers. Changes to the energy price cap is largely based on the market value of energy and the costs energy suppliers face.

Currently, due to an ongoing shortage of energy across the globe, and demand for energy increasing as nations start to recover from the effects of the pandemic; and head into the colder months; the wholesale price of energy has risen to never seen before levels, and as a result increased the energy price cap.

Reviewed twice annually by the UK’s electricity and gas network regulators: Ofgem; the energy price cap is at a high with even further increases to be made. The next increase, due to be announced on the 7^th of February 2022, will see the cap set at approximately £2000, and will come into effect in April. Apart from this, projections for October’s increase could see the cap set to a phenomenal high of £2400.

The surge in energy prices is distressing. Not only will it create more fuel poverty due to millions of households not being able to afford the elevated prices; but additionally, it will drastically impact the already remarkably high inflation rate and the cost of public debt. Overall, the cost of living will reach a critical level, and if the necessary steps are not implemented, who knows what other catastrophes may arise.

The Governments Solutions to the UK Energy Crisis

With the UK already facing the energy crisis, which is anticipated to get much worse, solutions need to be provided. But can the government really offer the ultimate solutions to this rapidly evolving crisis? Below we explore a few immediate and long-term steps which they could and potentially will take to ease the situation.

Government Funding and Schemes

Presently, the Warm Homes Discount Scheme offers vulnerable households, who receive pension credit or are on a low income, a one-off discount of £140 on their winter energy bill for 2021 to 2022. By expanding the scheme to 2026; the government will be able to tackle the potential increase of fuel poverty; and ensure that more fuel poor households can receive reductions on their energy bills effortlessly.

Secondly, with so many energy companies recently having gone into administration. Another funding scheme which the government will look at is supporting struggling companies. Offering government backed loans to struggling energy companies will not only help customers stay with their initial supplier and keep their charges down, but additionally will help stabilise prices of the energy wholesale market.

Cut VAT On Energy Bills

A cut in the VAT on energy bills could help 20-30 million households within the UK. However, with the cut in the 5% value added tax potentially costing the Treasury around £2billion; moving forward with the option seems to bring up a lot of controversy. Moreover, the cut in VAT will only see a £75-£100 reduction in household energy bills.

Insulate Homes

There is no doubt that insulating homes brings on several great benefits. From improved energy efficiency, healthier environments, reduced carbon emissions and even lower energy bills. When a home is well insulated, energy consumption and bills go down, particularly in the winter months. Having the government provide free insulation upgrades to vulnerable homes or implementing even higher building standards will definitely be beneficial.

Increase Renewable Energy Rollout

The ultimate way to avoid rising energy bills and increases on the energy price cap is becoming more and more evident on the daily. Increasing the rollout and uptake of renewable energy will result in a reduction on the UK’s reliance on fossil fuels and help avoid future UK energy crisis.

Why Renewable Energy is The Only Solution

The world is advancing, and nations worldwide are moving fast towards a net zero future in a bid to protect our planet from a complete climate catastrophe. Fossil fuels seem to be costing more and more each day. Even once prices stabilise; we risk the supply of fossil fuels fading as they do not naturally regenerate like that of renewable energy and only offer a limited supply. A quick fix is not the answer. Investing in renewable technologies is essential; not only when looking at ways to avoid any future energy crisis but similarly important for the protection of our planet.

The impact fossil fuels have on our planet is immense. Taking all the steps possible to avoid their use is imperative for us today; and for future generations to come too. Apart from this, Renewable energy is free, reliable and offers an inexhaustible amount of energy. Furthermore, most renewable energy technologies provide a much higher efficiency rate and also greater performance levels compared to traditional fossil fuelled systems.

Looking to Upgrade to Renewable Technologies?

At Bumblebee Energy, we offer a range of advanced renewable energy technologies that can help your property comply with forthcoming regulations, dramatically reduce your carbon footprint, and help you save hundreds of pounds on your energy bills.

Ready to switch to something more eco-friendly, energy efficient and money saving? For more information and to receive a FREE, No OBLIGATIONS quote enquire now.

DID YOU KNOW?

When eligible homeowners upgrade their heating system to an energy efficient, low carbon, future complaint heat pump; they can apply to receive tax free payments from the government for seven years through the Renewable Heat Incentive. With payments of +-£1300 per year. Many homeowners see themselves making back a large portion – if not all – of their initial investment. All whilst future-proofing their property and protecting the planet.

Click the link for more information on The Renewable Heat Incentive (RHI).