Households could save £440 a year on their energy bills from this summer and more fixed-rate deals could return, according to latest predictions.
Analysts at Cornwall Insight have today said they expect the Ofgem price cap to fall to £2,062.91 a year for average use from this July.
This could also spark the return of cheaper fixed rates, they said, after energy firms all pulled these deals when prices started rising in October 2021.
But consumers will need to weigh up their options so they don't lock into a deal that later turns out to be less competitive.
Due to the lack of fixed deals, most households have been forced onto variable rates, covered by the Energy Price Guarantee.
The Energy Price Guarantee has effectively replaced the Ofgem price cap and is set at £2,500 a year for someone with typical use.
But there isn't actually a total cap on how much you can pay for energy.
What both the Energy Price Guarantee and Ofgem price cap do is put a limit on how much you can be charged for unit rates and standing charges.
The headline figures you see above are just used to demonstrate what someone on direct debit with typical usage can expect to pay over a year.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said: “As the wholesale energy market has levelled out in recent weeks, our predictions for the price cap have followed suit.
“Some energy suppliers will potentially look to leverage this opportunity to bring back fixed tariffs on or around the price cap, with stable projections lowering concerns they will lose out over the fixed term.
“This potential re-emergence of competitive tariff propositions presents an opportunity for households to finally get a grip on their energy bills, having been hit hard by the energy crisis.”
However, he admitted “we are faced with several uncertainties as we look beyond the July price cap” as longer-term projections are harder to predict.
Prices are also still way above levels seen previously - the price cap stood at £1,042 a year between October 2020 and April 2021.
Cornwall Insight currently expects the October price cap to rise slightly to £2,098.22 in October then increase again to £2,162.55 in January 2024.
In other energy news, households using alternative fuels to heat their homes have three weeks left to claim £200 in energy support.
Around two million people across the UK use fuels such as heating oil, liquefied petroleum gas (LPG), coal, or biomass.
Most of these households should have automatically received the £200 Alternative Fuel Payment in February - but not everyone did.
The deadline for applying is May 31.
