Electricity is a “cleaner”, more environmentally friendly energy source but compared to gas, is electricity cheaper than gas? Currently, no – gas still costs significantly less. In fact, the difference in how much electricity costs is causing a nationwide debate known as ‘The Spark Gap’.
With the energy price cap running between 1st July and 30th September 2025, the cost of gas currently sits at 6.33p per kWh (kilowatt-hour) vs the cost of electricity, which is almost four times as much at 25.73p per kWh. This means that for anyone wondering which is more expensive gas or electricity uk, the answer is clear: electricity costs more right now. So if you’re asking “is gas more expensive than electricity”, the answer is also no – at least for now.
Although the energy price cap will change again in October 2025, electricity remains more expensive with two key factors affecting the overall cost in particular.
Why does electricity cost more than gas?
Green levies
Green levies are added to electricity bills vs gas bills, which may be holding people back from making the switch to an all-electric home.
Why is electric more expensive than gas? One of the biggest reasons is that the levy is an obligatory payment to the Government, who imposed an ‘environment and social obligation’ tax on electricity over the past decade.
In this case, it’s a payment which makes up part of your energy bill and in turn, pays for the privilege of using either electricity or gas in your home. Depending on which fuel you choose, your levy may be higher.
Currently, 23% of the total cost of electricity is made up of levies, whereas for gas this accounts for only 2%. This is a significant difference and one that is clearly causing a majority of the population to stick with gas, despite Government warnings about the harm to the environment caused by gas.
By enforcing such a high levy on electricity, the unit rate (or price per kW for electricity) is significantly higher than the price per unit for gas. With a focus on switching the nation over to a clean, electric future, imposing such costs will deter people from making the switch for fear of a more expensive electricity bill.
To add salt into the wound, not only is there a green levy, but commodities are also charged carbon tax, adding an ecological tax on products (such as electricity/gas) per tonne of CO2 released by it. The bit that doesn’t quite align with the Government’s clean energy plans is that currently green levy taxes are higher on electric vs gas.
Electricity needs gas to generate it – at a cost
To keep up with the demand and sustain the need for electric power, believe it or not, but natural gas is still required to generate electricity for the grid. Gas power stations burn natural gas, which creates heat to drive turbines around. The turbines are connected to generators and transformers which, as a result, create the much-needed electricity source in the UK.
Therefore, the cost of electricity is also dictated by the cost of natural gas needed to generate electrical power. However, since the Russian conflict in Ukraine has limited the supply of resources to import natural gas from Europe, it’s also impacting the cost of gas prices in the UK. This is one reason that “why is gas cheaper than electricity”, can be a complex question to answer – both are linked in production.
Updating your heating system is key to reducing renewable energy costs
While the cost of cleaner fuels like electricity are higher due to green levies, it’s no wonder a majority of UK homes are still utilising gas to power their heating systems. The lower costs of heating your home with gas may seem tempting, but change is expected since the UK as a whole is legally bound to have net zero carbon emissions by 2050.
As part of this mandate, the UK Government has scrapped its plans to ban the installation of gas appliances (in all new build properties) from 2025, and instead is rolling out the ‘Future Homes Standard’, which requires the installation of low-carbon heating systems like heat pumps, in new homes. The new standards should come into play fully later in 2025.
Not only that, there are existing Minimum Energy Efficiency Standards (MEES) for private rented residential and non-domestic commercial properties to comply with. Plus, by 2030, landlords are expected to achieve a minimum Energy Performance Certificate (EPC) rating of C for all domestic privately rented accommodation.
So, how can I make electricity more affordable?
What does this all mean for those wanting to make their home or property more energy efficient? Well, the Government has created a boiler upgrade scheme, providing grants worth £7,500 to contribute to the costs of installing an air source heat pump.
Despite the initial costly investment of making your home more energy efficient, with a robust energy efficient heating and power set up, the average three-bedroom house could reduce their energy bills by more than £46,600 over the course of a 25-year mortgage.
Futureproof your home with electric heating
With the clock ticking, although the cost of gas is currently cheaper than electricity, to save long-term more and more homeowners are asking “is electric heating expensive” – and discovering that the answer depends on efficiency. Many are making the switch to electric heating now in an attempt to future proof their properties in time for the impending 2050 deadline.
For those still wondering, “is electricity cheaper than gas” in the long run, the good news is that as renewable generation grows and green levies are rebalanced, electricity is set to become increasingly competitive. Switching now means enjoying the comfort, efficiency, and lower maintenance of modern electric heating while preparing for future savings.
The good news is that a number of UK energy suppliers are starting to provide renewable electricity, including our energy partner Outfox the Market, who offer cheaper fixed rate energy tariffs on 100% renewable electricity generated by UK wind farms.
Domestic homes emit 20% of the UK’s greenhouse gases, and the only way to bring this figure down is to switch to cleaner fuels.
At Fischer, we know that the future is electric, which is why we offer a wide range of electric heating solutions – check them out.
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