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TariffsThe price cap explained, and what it does to solar payback
The energy price cap does not cap your bill. It caps unit rates and standing charges, and the typical bill figure attached to it is arithmetic on an assumed household. Both details change what solar is worth.
Updated 4 August 2026 · written by the Clearline guidance team
What the cap actually caps
The price cap sets a maximum on the unit rate and the standing charge a supplier can charge a domestic customer on a standard variable tariff. It does not cap your bill, so a household that uses more electricity will pay more than the number in the headlines. The widely quoted typical bill figure is Ofgem multiplying the capped rates by an assumed household's consumption, nothing more.
| Capped element | 1 July to 30 September 2026 | Per year on the typical household |
|---|---|---|
| Electricity unit rate | 26.11p per kWh | £652.75 on 2,500 kWh |
| Electricity standing charge | 57.19p per day | £208.74 |
| Gas unit rate | 7.33p per kWh | £696.35 on 9,500 kWh |
| Gas standing charge | 29.04p per day | £106.00 |
| Total | £1,663.84, published as £1,663 |
Average capped rates for the quarter. Rates vary by region and payment method. Typical consumption values are 2,500 kWh electricity and 9,500 kWh gas.
That reconciliation is worth sitting with, because it shows exactly which parts of your bill solar can reach. The £314.74 of standing charges is fixed. You pay it whether you generate nothing or everything. Only the £652.75 of electricity units is in play.
Solar competes with 26.11p, not with £1,663
Every kWh you generate and use yourself displaces one you would have bought at the capped average of 26.11p. Every kWh you export earns whatever your export tariff pays, typically 3p to 15p. Standing charges are untouched. Any payback model that starts from the headline bill figure is starting in the wrong place.
Why the typical bill dropped £199 without a single price falling
Ofgem announced a 13 per cent rise to the cap on 27 May 2026, quoting a typical bill of £1,862 a year. The figure now quoted for the same cap period is £1,663. Nothing about the cap changed between those two numbers. Ofgem cut the Typical Domestic Consumption Values to 2,500 kWh of electricity and 9,500 kWh of gas, because households now use 7 per cent less electricity and 17 per cent less gas than they did against the October 2023 benchmark.
Same cap, smaller assumed household, smaller arithmetic. The £199 gap is a change in the yardstick, not in the price. If you want the honest like-for-like, the April to June 2026 quarter was £1,641 on the old consumption basis, and the July quarter was £1,862 on the same basis. That is the 13 per cent.
The rise was mostly gas
Within that 13 per cent, electricity rose around 5 per cent and gas rose around 24 per cent, driven by wholesale gas prices. For anyone weighing up solar, that matters: the thing solar displaces went up far less than the headline. It is also the reason heat pump and electrification cases are more sensitive to gas prices than to the cap headline.
What this means for solar payback
Payback is the installed cost divided by the annual benefit. The cap sets the biggest term in that benefit, and it resets every three months, which is the part most payback claims quietly ignore.
- Self-consumed generation is worth 26.11p per kWh this quarter, at the average capped rate.
- Exported generation is worth whatever your tariff pays. Open-market rates we could confirm on suppliers' own pages run from 3p to 15p, with installer-locked rates up to 25p. The full picture is in the export rates comparison.
- Standing charges are untouched by anything you generate. At 57.19p a day for electricity, that is £208.74 a year you keep paying.
- The ratio between the two matters more than either. A system that self-consumes 60 per cent of its output at 26.11p and exports 40 per cent at 12p averages 20.47p per generated kWh. The same system exporting on a 3p tariff averages 16.87p. Nothing changed on the roof.
That last bullet is the whole argument for treating tariff selection as part of the design. It is worked through properly in why tariff choice moves payback more than kit choice.
The cap moves, so payback models should say when they were built
The cap is reset quarterly. The October to December 2026 level will be published by 26 August 2026 and takes effect on 1 October 2026. Any payback figure quoted to you should carry the quarter it was calculated against, because a model built on 26.11p and presented as permanent is a forecast dressed up as a fact.
It is also worth remembering how much room there is in both directions. Current levels sit well below the 2022 crisis peak of £2,500, and around 22 million accounts, roughly 40 per cent of the market, sit on fixed tariffs that the cap does not touch at all. If you are on a fixed deal, the cap is a reference point rather than your actual price, and your solar arithmetic should use your real unit rate.
Find your own unit rate
Take it off a recent bill rather than the cap headline. Regional variation and payment method both move it, and a fixed tariff may put you somewhere else entirely.
Separate units from standing charges
Only the unit portion is addressable. Write the standing charge down separately so it never contaminates the savings figure.
Split generation into self-consumed and exported
Value each at its own rate. This is where a battery changes the answer, by moving units from the export column to the self-consumption column.
Re-run it when the cap changes
Quarterly. A model from two quarters ago is describing a market that no longer exists.
A free design call runs this arithmetic on your bill, your roof and your export options, with the date on every figure.
Get your free quote →Where a battery changes the sum
The gap between 26.11p and a 12p export rate is 14.11p per kWh. That is the value of moving a unit from the export column to the self-consumption column, which is exactly what a home battery does. Across 1,000 kWh redirected, that is £141.10 a year.
A battery also opens the second route, buying electricity in an off peak window at 6.99p to 9p and using it during capped-rate hours. That is a different gain again, running to 19.12p per kWh against the capped average, and it works in winter when generation is thin. We have set out the mechanism and its limits in off peak tariffs and battery charging.
Because unit rates vary by region, the version of this arithmetic that matters is the local one. Every county page across our coverage area carries a calculator built on the same model, and the solar guide covers the generation side.
Cap figures from Ofgem and a supplier restatement of the same cap, both checked 3 August 2026. The October to December 2026 cap had not been published at the time of writing.
Price cap questions, answered
How much is the energy price cap right now?
For 1 July to 30 September 2026 the average capped rates are 26.11p per kWh for electricity and 7.33p per kWh for gas, with standing charges of 57.19p and 29.04p a day. Ofgem's typical dual-fuel Direct Debit bill on those rates is £1,663 a year. Your own rate varies by region and payment method.
Why did the typical bill figure change from £1,862 to £1,663?
Ofgem cut the Typical Domestic Consumption Values used to calculate it, to 2,500 kWh of electricity and 9,500 kWh of gas, because households now use 7 per cent less electricity and 17 per cent less gas than the October 2023 benchmark. The cap itself did not change. Both figures describe the same unit rates.
Does the price cap cap my bill?
No. It caps the unit rate and the standing charge, so a household that uses more than the typical figures will pay more than the typical bill. This is why the cap headline is a poor starting point for a solar payback calculation and your own unit rate is a good one.
When will the October price cap be announced?
Ofgem publishes the level for 1 October to 31 December 2026 by 26 August 2026, and it takes effect on 1 October. Until then, any figure quoted for the autumn is a forecast rather than a published cap.
Does the price cap apply to me if I am on a fixed tariff?
No. Around 22 million accounts, roughly 40 per cent of the market, sit on fixed tariffs outside the cap. If that is you, use your contracted unit rate for any solar or battery calculation, because the cap headline may be well above or below what you actually pay.
Did the July rise make solar more worthwhile?
A little, but less than the headline suggests. The 13 per cent rise was made up of roughly 5 per cent on electricity and roughly 24 per cent on gas, and solar displaces electricity. A higher electricity unit rate does increase the value of every self-consumed kWh, which is the main channel through which the cap moves solar payback.
Should I wait for the October cap before deciding?
The cap resets every quarter, so there is always a next number coming. What matters more for a solar decision is the ratio between your import rate and your export rate, and the export side is set commercially rather than by Ofgem. Waiting for one cap announcement rarely changes the shape of the answer.
See the numbers next: Tesla Powerwall 3, installed, or export rates compared.
Figures and specifications in this guide are sourced below and were checked on the date shown. Rates and product specifications change; we confirm the current picture on your free design call.
Sources
- Ofgem, energy price cap will rise 13 per cent from July, including the electricity and gas splits, the £1,862 typical figure, the 2022 peak and the share of accounts on fixed tariffs, accessed 3 August 2026 ofgem.gov.uk
- Ofgem, changes to the energy price cap between 1 July and 30 September 2026, including average unit rates, standing charges and the October announcement date, accessed 3 August 2026 ofgem.gov.uk
- E.ON Next, price cap page restating the typical bill at £1,663 on revised Typical Domestic Consumption Values, accessed 3 August 2026 eonnext.com
- Octopus Energy, Outgoing Octopus export rate used for the self-consumption comparison, accessed 3 August 2026 octopus.energy
- EDF, GoElectric Overnight off peak rate used for the battery comparison, accessed 3 August 2026 edfenergy.com
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