Energy regulator Ofgem has confirmed bills will fall by 7% in July, or £122 on an annualised basis.
The energy price cap will be set at £1,568 for direct debit customers from July to the end of September, down from £1,690 currently, Ofgem said on Friday.
This determines how much suppliers can charge per unit of electricity or gas, with these set to cost 22.36p and 5.48p per kilowatt-hour respectively.
Prepayment meter customers will see the cap reduced to £1,522, while it will be set at £1,668 for those on standard credit deals.
“Another fall in the price cap is good news for customers who were facing bills that were hundreds of pounds higher this time last year,” Energy UK deputy chief executive Dhara Vya commented.
Ofgem’s cap had sat at £2,074 last July, on the back of higher energy prices after Russia’s invasion of Ukraine.
The cap reflects what the typical household would pay over the course of a year on current rates, meaning most will pay more or less based on consumption.
Standing charges, paid regardless of usage, will be broadly unchanged, climbing from 60.10p to 60.12p a day for electricity and falling from 31.43p to 31.41p for gas.
Lower wholesale costs have bought the price of the cap down, according to Ofgem, though suppliers’ earnings before interest and taxes allowance will be higher.
“It’s only a return to relative normality,” Vya added.
“Energy bills are still larger than they were just over two years ago and prices will remain high and unstable for some time to come.”