Experts say the government’s decision to introduce a price cap on energy bills will not only help households who are struggling financially but may also encourage people to take more steps to save energy.

Details of the deal agreed between the finance ministry and energy companies still have to be finalised, but the plan is expected to save households around €2,000 a year.

The government will set a maximum unit price for gas and electricity that will cover the first 1,200 m3 of gas and 2,400 kWh of electricity – the annual fuel consumption for an average household. Any energy used above that level will be charged at an uncapped rate based on market prices.

The government says average household will pay around €290 a month for gas and electricity next year under the proposed price cap. The exact rates have not been finalised, but are expected to be around 70 cents for a unit of electricity and €1.50 per cubic metre of gas.

This, experts say, makes it financially attractive for people to make sure their energy use stays below the ceiling.

Ruut Schalij from energy specialist company eRisk Group told news website Nu.nl he expects to see the ‘biggest savings on energy spending ever’.

‘Entire families will be able to join in,’ he said. ‘How can we keep our gas use under the 1,200 m3 limit. It will be a great competition, because it can be done.’

The government estimates that around half the country’s eight million households use less energy than the price ceiling covers – but that figure is strongly influenced by the number of people living alone.

Families

Broadcaster RTL says that single person households are likely to remain below the price ceiling and will pay around €205 for gas and electricity in the coming year.

Couples living in terraced housing may use slightly more than the government’s estimate, and face bills of around €308 a month.

However, families living in bigger houses, who use far more energy than the ceiling limit, will face much higher bills of around €680 a month, RTL said.

RTL has a tool to help people estimate how much they will spend on gas and electricity next year.