Renewables Obligation: buy-out price and mutualisation threshold and ceilings 2026 to 2027
The Renewables Obligation (RO) scheme encourages energy companies to use renewable energy sources. Electricity suppliers must present a specified number of Renewables Obligation Certificates (ROCs) per megawatt hour (MWh) of electricity supplied during each obligation period.
Buy-out price and mutualisation threshold and ceilings 2026 to 2027
The buy-out price is the amount suppliers must pay for each ROC they do not present. Mutualisation is triggered when there’s a shortfall in the buy-out fund. Ofgem divides the shortfall amongst the remaining suppliers to cover the cost.
Buy-out price for 2026 to 2027
£69.34 per Renewables Obligation Certificate
Mutualisation threshold for 2026 to 2027
England and Wales: £83,300,000
Scotland: £8,300,000
Mutualisation ceiling for 2026 to 2027
England and Wales: £417,747,225.53
Scotland: £41,774,722.53
Mutualisation does not apply in Northern Ireland.
Definition and shortfall amount
You can find the definition and shortfall amount per obligation period for England and Wales in Article 72 (3) in the Renewables Obligation Order 2015 as amended by the Renewables Obligation (Amendment) Order 2021.
You can find the definition and shortfall amount per obligation period for Scotland in Article 48 (3) and Schedule 3 in The Renewables Obligation (Scotland) Order 2009 as amended by The Renewables Obligation (Scotland) Amendment Order 2023.
Annual updates
We previously updated the buy-out price and mutualisation ceilings annually to reflect the average monthly percentage change in the Retail Prices Index (RPI) during the preceding calendar year. However, following DESNZ’s decision as announced on 28 January 2026 this will now be based on the monthly change in the Consumer Price Index (CPI) during the preceding calendar year, with the change taking effect from 1 April 2026.
Applying this change to the inflation figures based on a CPI change of 3.4% (Source: Office for National Statistics) for 2025 calendar year the buyout price for 2026/27 RO year 1 from Apr 2026 to 31 Mar 2027 would be £69.34.
On 11 February 2026, Ofgem reported on the above proposed changes to the buy-out price and mutualisation thresholds for 2026.
We update the mutualisation thresholds annually based on the value of the scheme.