The average home currently pays £1,928 a year for gas and electricity bills, however, customers can expect lower energy costs for the rest of 2024.
Energy bills are projected to fall by an average of 15 percent – equivalent to £293 in annual savings.
Cornwall Insight has released its final forecast for the April – June default tariff cap (price cap).
The predicted price cap for April is £1,635 per annum for a typical dual-fuel household.
If the price cap does fall, it would be the lowest Britons have seen their energy bills in two years.
This forecast includes the new £16 bad debt allowance, though its inclusion in the cap awaits official confirmation from Ofgem.
The decrease in the energy price cap is attributed to favourable factors such as steady LNG supply through the Atlantic amidst geopolitical tensions in the Red Sea region, along with ample availability of LNG cargoes in Europe and Asia due to mild weather conditions.
The new rate will apply to a home with average energy use, on a variable-rate energy tariff and paying by direct debit.
The current price cap sets the energy bills paid by more than 80 percent of UK homes, though the exact amount varies depending on gas and electricity use.
Despite the drop, energy prices remain above pre-pandemic levels meaning many households will continue to struggle.
Cornwall Insight thinks the average gas and electricity bill will fall again to £1,465.07 in July, before rising to £1,523.95 in October.
The official announcement of the cap by Ofgem is scheduled for February 23.
Craig Lowery, Cornwall Insight principal consultant said: “Forecasts show energy bills returning to their lowest levels in over two years, providing a much-needed respite for a nation struggling with a cost of living crisis.
“Fairly healthy gas supply across the Atlantic, coupled with high storage levels in Europe, are helping to keep bills down. But we mustn’t get too complacent.
Richard Neudegg, director of regulation at Uswitch.com, commented on the predictions and explained that today’s forecast is “a clear indication” that energy prices are finally moving in the right direction and would be the lowest cap in two years.
He said: “Consumers won’t feel the benefit from a fall in rates until the price cap comes into effect in April, so positive though today’s prediction is, it can’t help households save on heating their homes just yet.
“Prices are forecast to fall again in July, but the market remains unpredictable, and it is hard to know how energy rates will look when usage climbs again in winter.
“With more than just a glimmer of hope on the horizon for wholesale energy costs, all eyes are now on suppliers to see how they will price their other deals. Consumers have waited long enough for better tariff choices, and desperately need the opportunity to take advantage of cheaper rates.”
