Ofgem Price Cap

The price cap, formally the default tariff cap, limits the unit rate (p/kWh) and the standing charge (p/day) that suppliers can charge households on standard variable and default tariffs. It does not cap total annual cost: a home that uses more energy pays more. Fixed-term tariffs sit outside it. Ofgem sets it under the Domestic Gas and Electricity (Tariff Cap) Act 2018 and publishes the levels by region and payment method.

How it is built

The cap is a sum of allowances, each with its own published methodology: wholesale energy, network costs, policy costs (including the CfD and Capacity Market allowances), operating costs, debt-related costs, EBIT, headroom and VAT.

The wholesale part: the 3-1.5-12 window

Wholesale is the largest moving part. On every trading day of a three-month observation window that closes about 1.5 months before the cap period starts, Ofgem prices the forward contracts for the 12 months from the cap start, weighted by when households use energy. Averaging over a window that ends before the period begins is why the cap trails the wholesale market rather than tracking it day to day.

Timing

Cap periods run January to March, April to June, July to September and October to December. Once the window closes, Ofgem sets the level within about a week and publishes it around 25 working days before it takes effect. In practice the announcement lands in late February, May, August and November.

Typical consumption

The headline £ per year figure applies the cap rates to Ofgem's Typical Domestic Consumption Values (TDCVs). From 1 July 2026 the medium values are 2,500 kWh a year for single-rate Elec and 9,500 kWh for gas, down from 2,700 kWh and 11,500 kWh. A headline quoted before that date sits on the old basis, so comparisons across it need restating to one basis first.

EnergyCode forecast

EnergyCode forecasts the next cap daily, on the 2,500 / 9,500 kWh basis, in the Ofgem Price Cap Prediction tool.