Will Energy Prices Go Down in 2026?

Will energy prices go down in 2026? Read on to find out.

Energy costs have never been more unpredictable. Business leaders should prepare for higher energy bills in 2026. Now is the time to act.

Whilst wholesale gas prices eased from 2023-25, down from their 2022 peak¹, business energy costs remained structurally high during the period. Electricity prices were still around 75% above 2021 levels, indicating that easing in wholesale markets had not materially reduced the cost burden for UK businesses. As of April 2026, the Gulf Crisis² reintroduced widespread uncertainty, further strengthening the case for sustained price pressure.

In response to the question of whether energy prices will decline in 2026, it is highly likely that the UK will continue to see sustained cost increases for as long as trade flow through the Strait of Hormuz remains blocked.

Coupled with the rise of non-commodity energy costs, it is clear that business energy costs are unlikely to fall for the foreseeable.

In this climate, the case for taking control of energy costs through on-site solar and battery technology has never been stronger.

In this guide, Ineco Energy will provide a top-level overview of key forces driving the UK energy price forecast for 2026.

Whether you’re responsible for the financial planning, cost control, and/or capital allocation for one or more sites, in the next ten minutes, you’ll gain:

• An understanding of what’s driving current and future UK business energy prices.
• Insights into how global events and domestic trends interact to shape your overall energy costs.
• A look at how non-commodity charges could affect your operational expenses in the coming year.
• Why financial planners and other business leaders are turning to solar to control rising energy costs in an increasingly unstable price environment.

Let’s begin by unpacking why global energy trends can lead to energy price instability.

What the crisis in the Gulf and Ukraine War reveals about UK energy vulnerability and wholesale gas price action

The war in Ukraine, which began in February 2022, exposed a crucial vulnerability in the UK energy pricing system: its dependence on internationally traded natural gas. According to the Office for National Statistics (ONS)³, UK electricity prices for non-domestic users (businesses) rose by over 90% between the first quarter of 2021 and their peak in late 2023:

“Since 2021, the average electricity price for UK non-domestic users has increased sharply from 14.81 pence per kilowatt hour (kWh) in 2021 Quarter 1 (Jan to Mar) to a peak of 28.39 pence per kWh in 2023 Quarter 4 (Oct to Dec) – a rise of over 90%. Since then, the average electricity price has fallen back to 25.97 pence per kWh in 2024 Quarter 4. However, this is still 75% higher than the average price at the start of 2021.”

Before the Ukrainian crisis, much of Europe, particularly Germany, relied on pipeline gas from Russia. When that supply was disrupted, the UK and its European neighbours were forced to compete for more expensive Liquefied Natural Gas (LNG) shipped from the United States, Qatar, and Africa. This increase in competition brought the price of LNG significantly higher than it was in the pre-war era. The consequence for non-domestic users was stark: In 2023, the UK reported the highest industrial electricity prices among 24 countries reporting to the International Energy Agency (IEA), with prices around 46% above the IEA median (ONS, 2025).

The reason for this high sensitivity lies in how UK electricity prices are set. The ONS reports that although gas‑fired power stations generate a minority of total electricity, they often set the marginal price in the wholesale market, so spikes in wholesale gas prices are rapidly transmitted to the wider price of energy in the country.

The 2026 Gulf Crisis caused price shocks as a result of the same causal chain:

• Less supply in the Gulf tightened global LNG availability.
• That increased competition for LNG cargo pushed LNG prices up.
• Higher LNG prices raised the cost of gas-fired power generation.
• Because gas often sets the wholesale electricity price in the UK, power prices rose too.

The bottom line

The Gulf energy crisis and Ukraine War are extreme examples of how geopolitical changes that affect global energy supply chains can and will raise the cost of operating your site(s).

Let’s now look at domestic energy trends that are pushing costs up this year.

Local energy trends: The growing weight of non-commodity costs

Even if wholesale gas and electricity prices were to stabilise, sites across the UK are likely to face higher energy expenditure due to increasing non-commodity charges and factors.

According to energy market researchers at Cornwall Insight⁴, non-commodity charges, which include network costs, policy levies, and other regulatory fees, are forecast to make up nearly 60% of a typical business electricity bill in 2026. Cornwall Insight’s analysis shows a range of drivers behind this increase, including:

• Rising transmission network costs.
• New bill components, such as the Nuclear Regulated Asset Base⁵.
• Exemption schemes that concentrate rising costs on businesses outside those schemes.

Importantly, Cornwall Insight notes that whilst around 500 businesses covered by energy-intensive industry exemption schemes may see some relief, the majority of UK non-domestic users will not benefit from these protections. For these sites and developments, non-commodity costs represent a rising, largely uncontrollable element of their operations bill.

Will energy prices go down in 2026? A balanced assessment

A balanced answer to the question ‘will business energy prices in the UK go down in 2026?’ is almost certainly not. The factors illustrated above create an increasingly difficult energy landscape, where prices are unlikely to ease in the year ahead.

Here are a few key takeaways:

• Prior to the Gulf crisis, energy prices were already elevated and are expected to increase further for as long as trade is throttled in the Strait of Hormuz.
• Wholesale electricity prices are subject to sudden geopolitical changes.
• Geopolitical risks have significantly increased as of April 2026.
• Continued disruptions to international supply chains, whether from sustained conflict in the Gulf, extreme weather, or fluctuations in LNG export policy, are likely to push prices even higher.
• Policy and network charges are likely to continue to climb, driven by necessary but costly infrastructure investment programmes, as the UK seeks to invest in domestic production amidst insecure global supply chains.

For business leaders planning budgets, cost controls, and an energy strategy, factoring in higher energy prices will be essential.

How businesses are responding: solar

Across the UK, a significant number of business leaders are choosing to respond to sustained energy cost pressures by simply reducing their dependence on and exposure to the grid. This shift helps explain the rapid growth in commercial rooftop and on-site solar deployment over the past five years.

Major economic sectors (FMCG, manufacturing, logistics, retail, and real estate sectors) are gradually turning to their own roof space as a practical and cost-saving source of year-round energy.

Solar rooftop systems provide significant energy cost savings, whilst also delivering measurable reductions in scope 2 emissions. Provisional data from early 2026 indicates that roughly 21.6—22GW of capacity has been installed in the UK⁶, up from 18GW when measured in early 2025, with commercial rooftops playing a growing role in that total. This significant increase signals that business leaders are prioritising solar.

Combining solar with cutting-edge battery technology

Solar rooftops are increasingly combined with battery storage systems, allowing large sites to capture surplus daytime generation and then utilise it during peak consumption periods. As battery technology becomes more affordable and efficient, the combination of solar and battery storage is shifting from a premium option to a commercial priority.

Ineco Energy: delivering operational excellence and outstanding solar expertise

Ineco Energy has a decade of experience working in commercial and industrial hubs to reduce their site energy costs and carbon footprint through the design, installation, and ongoing maintenance of on-site solar and energy-efficiency solutions.

We’ve had the pleasure of working with the biggest UK names including, but not limited to Ørsted, PepsiCo, Aviva, London Metric Property PLC, and Severn Trent Water.

You can learn more about Our Projects here.

If you’re a financial planner or CFO evaluating your site’s options in light of increased UK energy price forecasts, Ineco Energy provides the full range of support required to move from initial planning to fully operational systems and ongoing operations and maintenance.

Whether your priority is decreasing operational expenditure, improving budget certainty, hitting ESG targets, or simply making better use of existing roof space, our rooftop solar solutions offer compelling financial returns and strategic value in an increasingly uncertain energy landscape.

Remember, 2025 was the sunniest year on record⁷. The case for acting in 2026 is stronger than ever.

Ready to see how solar can reshape your business?

Contact Ineco Energy today for a free, no-obligation commercial solar assessment.

Call: 029 2002 1777  |  Or fill out our contact form for solar support.

Sources

1. Renewable Exchange, ‘A Look Back at Wholesale Power Prices in the UK: 2020–2023’, released 7 November 2024.
2. BBC News, ‘How Iran war laid bare the world’s reliance on Gulf oil and gas’, released 12 March 2026.
3. Office for National Statistics, ‘The impact of higher energy costs on UK businesses: 2021 to 2024’, released 19 May 2025.
4. Cornwall Insight, ‘Energy Market Predictions for 2026 – The Trends That Will Reshape the GB Power System’, released 17 December 2025.
5. EMR Settlement, ‘What is the Nuclear RAB scheme and why do we need it?’, released 26 January 2025.
6. PV Magazine International, ‘UK added 2.6 GW of solar in 2025, record year for rooftop’, released 29 January 2026.
7. Met Office, ‘2025 is double-record breaker: UK’s warmest and sunniest year on record’, released 2 January 2026.