Will Energy Prices Go Down in 2026 in the UK?

Article summary:

• UK energy prices are unlikely to go down in 2026.
• Factors that drive prices up include LNG and oil supply shocks because of the 2026 Gulf War and the ongoing Ukraine war.
• Businesses in the UK are responding to volatile energy prices by installing commercial solar systems to take advantage of increasingly sunnier spring and summer months.

In this article

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

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

Will energy prices go down in 2026? A balanced assessment

How businesses are responding: solar

Combining solar with innovative battery technology

Introduction

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, the UK will continue to see sustained cost increases as long as trade through the Strait of Hormuz remains blocked.

Coupled with the rise of non-commodity energy costs, business energy costs are unlikely to fall for the foreseeable future.

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 are responsible for the financial planning, cost control, and/or capital allocation for one or more sites, in the next ten minutes, you will gain:

• An understanding of what is 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 us begin by unpacking why global energy trends can lead to energy price instability.

What the crisis in the Gulf and the 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:

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 pushed LNG prices significantly higher than in the pre-war era. The consequence for non-domestic users was stark: In 2023, the UK reported the highest industrial electricity prices among twenty-four 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 energy price in the country.

The 2026 Gulf Crisis caused price shocks because of the same causal chain:

• A shortage of supply in the Gulf tightened global LNG availability.
• Increased competition for LNG cargo pushed 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 as well.

The bottom line for energy prices

The Gulf energy crisis and the 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 us now look at domestic energy trends driving up costs this year.

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

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

According to energy market researchers at Cornwall Insight⁴, non-commodity charges, including network costs, policy levies, and other regulatory fees, are forecast to account for 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, most UK non-domestic users will not benefit from these protections. For these sites and developments, non-commodity costs represent a rising, uncontrollable element of their operational costs.

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 certainly not. The factors illustrated above create an increasingly difficult energy landscape, where prices are unlikely to ease in the year ahead.

Here are five core key takeaways:

• Before the Gulf crisis, energy prices were already elevated and are expected to rise further as long as trade through the Strait of Hormuz remains throttled.
• Wholesale electricity prices are subject to sudden geopolitical changes.
• Geopolitical risks have significantly increased as of April 2026.
• Ongoing 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 increase domestic production amid insecure global supply chains.

For business leaders planning budgets, cost controls, and an energy strategy for 2026 and beyond, factoring in higher energy prices will be essential.

How UK businesses are responding: solar

Across the UK, a considerable 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) are gradually turning to their own roof space as a practical, cost-saving source of year-round energy.

Solar rooftop systems provide significant energy cost savings, whilst also delivering measurable reductions in scope two emissions. Provisional data from early 2026 indicates that roughly 21.6—22 GW of capacity has been installed in the UK6, up from 18 GW 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 innovative battery technology

Solar rooftops are increasingly paired with battery storage systems, enabling large sites to capture surplus daytime generation and use 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 have 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 are a financial planner or CFO evaluating your site’s options considering 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.