That distinction is important when considering how your home uses energy and which improvements might genuinely reduce your exposure to future price changes.
1 October – 31 December 2026
The new energy price cap rates
The new cap applies from 1 October to 31 December 2026.
For households on a standard variable tariff paying by Direct Debit, the average rates across England, Scotland and Wales will be:
| Energy charge | 1 July to 30 September 2026 | 1 October to 31 December 2026 |
|---|---|---|
| Electricity unit rate | 26.11p per kWh | 26.32p per kWh |
| Electricity standing charge | 57.19p per day | 54.83p per day |
| Gas unit rate | 7.33p per kWh | 7.97p per kWh |
| Gas standing charge | 29.04p per day | 29.68p per day |
Important to understand
£1,723 is not a maximum bill
Despite its name, the price cap does not place a limit on the total amount a household can pay.
Not a cap on your total
Why the headline changed
Why does £1,723 appear lower than the previous £1,862 headline?
Earlier in 2026, the July price cap was widely reported as £1,862. Ofgem has since updated the amount of energy it assumes a typical household uses.
| Previous benchmark | New benchmark | |
|---|---|---|
| Electricity | 2,700 kWh | 2,500 kWh |
| Gas | 11,500 kWh | 9,500 kWh |
The previous calculation assumed annual consumption of 2,700 kWh of electricity and 11,500 kWh of gas. The new benchmark is lower because average household consumption has fallen.
This change makes the headline figure look smaller, but it does not represent a reduction in the underlying rates. Ofgem says that, using the old consumption benchmark, the October figure would be £1,935, up from £1,862.
Like-for-like comparison
What is driving the change?
Why is the price cap rising?
Ofgem says higher wholesale gas prices are the main cause of the increase.
Although wholesale costs are pushing up both fuels, the temporary removal of VAT from electricity is cushioning the effect on electricity bills. Ofgem estimates that the typical cap would have been around £45 higher without the VAT change.
- Lower impact
- Higher impact
Main pressure
Higher wholesale gas prices are the main cause of the increase.
Smaller impact
The average electricity unit rate rises slightly, but the electricity standing charge falls.
Fixed tariff
Fixed-tariff customers will not be directly affected by the cap increase while their existing fixed rates remain in force.
October 2026
As a result:
Around 22 million households are protected by the cap, while Ofgem estimates that approximately 11 million households are currently on fixed tariffs.
Before 1 October
What can households do before October?
Start by checking whether you are on a standard variable tariff or a fixed deal. Compare any available fixes using your own annual consumption, not just the supplier's estimated monthly payment.
It is also worth:
Practical steps before the new rates begin
- Submitting an up-to-date meter reading before the new rates begin.
- Checking whether your Direct Debit reflects your actual usage.
- Looking at time-of-use tariffs if you have a smart meter and can move some consumption away from expensive periods.
- Contacting your supplier promptly if you are struggling to pay. Suppliers are required to discuss support options, which may include an affordable repayment plan or emergency credit.
Tariff changes can help in the short term. For greater protection from repeated market changes, homeowners can also consider changing how their home is heated and reducing the amount of energy they need to buy.
Moving away from gas
A heat pump can reduce dependence on gas
Because gas is driving most of the October increase, homeowners replacing an older gas, oil or LPG heating system may wish to investigate an air source heat pump.
A heat pump uses electricity to move heat into the home rather than producing it by burning fuel. When correctly designed for a suitable property, it can provide efficient heating while reducing or removing the home's direct exposure to gas prices.
This does not mean a heat pump will automatically reduce every household's bills. Running costs depend on the building's heat loss, radiator or underfloor-heating design, flow temperature, electricity tariff and how the system is operated.
What affects running costs?
- Heat loss
- Radiator design
- Flow temperature
- Electricity tariff
- System operation
A proper heat-loss calculation and property survey should therefore come before any recommendation.
Supporting an electric home
Solar panels can support a more efficient electric home
Once heating is moved from gas to electricity, the way that electricity is generated and purchased becomes increasingly important.
Solar panels generate electricity from daylight, allowing the home and its heat pump to use that electricity before drawing power from the grid.
Every unit of solar electricity used in the home reduces the amount that needs to be purchased from an energy supplier. Surplus generation can also be exported through an eligible Smart Export Guarantee tariff to create a useful income for the property.
The result depends on the roof, system size, shading, household consumption and when electricity is used. A system should therefore be designed around the property and its occupants rather than simply installing as many panels as possible.
Solar generation is strongest during spring and summer, so it will not remove the need to purchase electricity for winter heating. It can, however, contribute to annual household demand and help reduce daytime grid imports.
Store it for later
Battery storage makes daytime generation available later
Solar panels often generate most strongly around the middle of the day, while many homes consume more electricity in the morning and evening.
Battery storage can store surplus solar electricity for use after sunset. This can increase the proportion of solar generation used in the home and reduce evening grid imports.
A battery can often be added to an existing solar installation, including systems installed by another company. Some households without solar may also use a battery with a suitable time-of-use tariff, charging when electricity is cheaper and using the stored energy at more expensive times.
For homes with heat pumps, a battery may provide additional flexibility by shifting some electricity use away from more expensive periods. However, it must be sized around the home's actual electricity demand and should not be expected to cover an entire winter heating load.
Whether a battery represents good value depends on its size, household demand, tariff rates, efficiency and the difference between peak and off-peak prices.
Illustrative only
Typical daily energy flow
12:00
Daytime
19:00
Evening
Battery storage shifts electricity in time; it does not create additional energy.
Charge smarter
Smart EV charging helps avoid unnecessary peak-rate use
An electric vehicle can add significantly to household electricity consumption, but much of that charging can be scheduled.
A dedicated home EV charger can help drivers charge when surplus solar generation or lower-cost off-peak electricity is available. This can reduce charging costs compared with drawing electricity at an expensive time and is more suitable – and safer – for routine charging than relying on a standard three-pin socket.
Typical charging choice
Same car. Better timing.
Smart schedule
- 18:00
- 00:00
- 06:00
Solar-compatible charging can also direct surplus generation into the car when it is available.
Start with the home
The right answer depends on the home
Not every household needs a heat pump, solar panels, a battery and an EV charger.
A home currently heated with gas, oil or LPG may have a strong reason to investigate a heat pump. Another property may achieve its best result with solar alone. A household that already has solar but exports most of its daytime generation may benefit from a battery retrofit, while an EV owner may simply need smarter charging.
One home energy system
The systems can also be planned together:
Your next step
Find out what actually makes sense for your home.
- Free survey
- No obligation
- South West installers
Simple Solar designs and installs air source heat pumps, solar panels, battery storage and EV chargers across the South West. A free home survey can identify which options are suitable, estimate their likely performance and explain the costs clearly.