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Mind The Spark Gap!
The “spark gap” is the difference between the price of electricity and gas – and it can have a big influence on whether technologies such as heat pumps and electric vehicles make financial sense to households.
Right now, that gap is narrowing. Octopus Energy reports that the spark gap has fallen by 7% to its lowest level since the energy price cap began in 2019. One reason is rising international gas prices, while renewable generation is helping reduce electricity's exposure to those increases.
So, what does that mean for homeowners?
Electricity is currently relatively cheaper compared with gas, strengthening the financial case for moving away from fossil-fuel technologies. Octopus says live data from thousands of its Cosy heat pumps shows 99.6% of those customers are paying less to heat their homes than they would with a gas boiler. It also says the average driver on its Intelligent Octopus Go tariff saves more than £850 per year compared with running a similar petrol car. These are Octopus's figures and will not necessarily apply to every household.
The bigger picture is about making better use of renewable electricity. As more homes adopt heat pumps, EVs and other electric technologies, smart meters, batteries and time-of-use tariffs can help shift electricity use away from the busiest periods - potentially reducing costs while easing pressure on the grid.
Octopus argues that the long-term solution isn't simply shifting levies or subsidies around, but making electricity genuinely cheaper at source. Its proposals include reducing wasted wind generation, relying less on gas, using existing grid infrastructure more efficiently and encouraging greater use of home battery storage and flexible tariffs.
The takeaway: as the gap between electricity and gas prices narrows, technologies such as heat pumps, solar, battery storage and EVs become increasingly attractive parts of an electrified home - particularly when they're combined with smart tariffs and smarter energy use.
And don't forget, Carter Renewables are an official Octopus Trusted Partner, allowing new customers to get a £50 credit if you sign up to an Octopus tariff via our bespoke affiliate link here.
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