Skip to main content

What Is The Energy Price Guarantee (EPG)?

The Energy Price Guarantee (EPG) is an initiative by the UK government to set a limit on the price of energy. It was made in response to the UK energy crisis and is designed to protect consumers from rising energy costs. The idea is to help energy customers pay less on their gas and electricity bills. So, let’s dive into how it works, its rates, and its impacts on your business.

Business Energy Comparison Background - Blue
Laptop on table in dark room with light shining above

How The Energy Price Guarantee Will Affect Your Business?

Unfortunately, there’s currently no price guarantee for business energy customers. But, the government has introduced measures like the Energy Bill Relief Scheme, which provides discounts for dual fuel customers. The scheme has since been replaced by the Energy Bills Discount Scheme.

With this new scheme, a standard or typical dual-fuel customer can enjoy a business electricity or business gas unit rate discount. This’ll then lower prices and result in a more ‘affordable’ energy bill. Do note that the discount is applied to the average unit rates, based on typical energy consumption.

For your typical household, the energy price cap will affect your energy prices in pretty much the same way as the EPG. Suppliers will have a price cap that they have to adhere to. So households will have a cap on their energy bill regardless of what’s happening in the energy market. This means that you won’t have to worry about sudden price hikes and can benefit from having more predictability and stability.

Both of these initiatives ensure that businesses and households can better manage their energy consumption and budget their expenses.

What Are The Energy Price Guarantee Rates?

Here’s the average unit price for gas and electricity and average standing charges. These are applicable to direct debit customers but these direct debit rates are very close to the average unit prices.


  • Unit rate – 7.51p per kWh (New energy price cap), 10.31p per kWh (Current EPG)
  • Standing charge – 29.11p per day (New energy price cap), 29.11p per day (Current EPG)


  • Unit rate – 30.11p per kWh (New energy price cap), 33.21p per kWh (Current EPG)
  • Standing charge – 52.97p per day (New energy price cap), 52.97p per day (Current EPG)
Business Energy comparison

Because the Energy Price Guarantee is designed to protect customers from wholesale energy costs, your typical household shouldn’t pay more than £2,500 a year for energy. The price cap is meant to save a typical household around £1,000 on electricity a year. But actual savings will depend on how much energy and your payment method.

The EPG will come into effect automatically from 1st October, but the way it’ll function depends on your tariff type:

Variable Tariff Customers

Those on a variable tariff will receive a unit rate discount. This’ll bring unit prices down to around 34p per unit of electricity and a gas unit rate of 10.3p per unit. This amount will vary depending on where you operate.

Fixed Tariff Customers

If you’re on a fixed-rate tariff, the energy price cap will give you discounted rates of up to 17.8p per unit of electricity and 4.4p per unit of gas. But, Ofgem’s price cap can only bring the rates down as low as a standard variable tariff.

The EPG will discount fixed tariff unit rates by up to a certain amount per unit of gas and electricity. But, it can only bring the tariff down as low as the floor unit price.

Direct debit customers

Much like variable-rate customers the EPG reduces direct debit unit prices to around 34p per unit of electricity and 10.3p per unit of gas. Generally, direct debit is less admin, so some suppliers may offer direct debit customers a further discount.

Prepayment Customers

For customers with a prepayment meter, the EPG will be applied to the rate you pay for each unit of energy. This’ll effectively make your credit last longer. The discount is automatically applied, so you won’t have to apply for or use special vouchers.

Standing Charges

Your standing charge will remain capped according to the levels set by Ofgem’s price cap.

Final Thoughts

For the larger part, the EPG has been a seemingly well-received initiative on the part of the UK government. It provides a much-needed cap on gas and electricity prices in what is a truly volatile market, thus giving many much more certainty.

But, if you’re a business owner who’s still unsure of what this means to you, consider getting in touch with energy experts. At Business Energy Comparison, we serve as a trusted resource for everything related to business energy. Besides giving you insight into how the electricity and gas markets operate, we can help you save on your energy bills by comparing contracts from top suppliers.

We can help anyone from SMEs to large businesses. So, get in touch and take control of your business energy costs.

Start your journey and compare business gas and electricity rates with Business Energy Comparison today. Use our price comparison tool and in less time than it takes to make a brew, we’ll compile your best prices from the UK’ s best suppliers.

Frequently Asked Questions

What are floor unit prices?

Floor unit prices are the minimum price set by the government under the Energy Price Guarantee. Although floor unit prices vary by region and payment type, they represent the minimum that suppliers can charge under the EPG.

What are standing charges?

Standing charges are fixed daily costs on your energy bill. These charges cover the cost of maintaining the energy network and are also put towards government energy initiatives. Regardless of your usage, you have to pay standing charges. Although, you may find that some tariffs don’t have standing charges but may have higher electricity or gas unit rates.

Should I switch to a fixed energy tariff?

Switching to a fixed energy tariff on your business or domestic electricity contract could give you some more clarity about how much you’ll be paying during a contract, which is usually 12 to 24 months. Fixed-rate tariffs can work well if energy prices increase, as your rates will stay at the same price. But, if energy prices drop, you could end up paying more than necessary or more than your competitors on variable tariffs.

Are there any other measures to help energy customers?

Yes, besides the EPG, there are a number of ways that customers can offset the cost of their energy bill:

  • Prepayment meters – With a prepayment meter, customers pay for electricity before they use it.
  • Winter Fuel Payment – If you were born on or before 5 October 1954, you’re eligible to receive £100 and £300 in tax-free payment to help pay your heating bills.
  • Warm Home Discount Scheme – A one-off discount on your energy bill, if you’re eligible.
  • Energy Company Obligation (ECO) – A pledge by energy suppliers to improve the energy efficiency of homes and, ultimately, lower energy bills.

These options are largely applicable to households and not businesses. Businesses have the option of the Energy Bills Discount Scheme, which is similar to the Energy Bills Support Scheme and can help a lot with your business utilities.

What's the difference between fixed-rate tariffs and variable-rate tariffs?

Fixed-rate tariffs lock in the price you pay per unit of energy, giving customers more certainty over what they’ll pay. With variable-rate tariffs, or standard variable tariffs, the price per unit changes according to the state of the electricity and gas markets. Standard variable tariffs can save you money when there are unit price reductions but they can also be more expensive if prices increase.