Default Tariff Cap - information for suppliers

The Default Tariff Cap came into force on 1 January 2019. The cap is temporary, and applies to tariffs for all customers on standard variable and default energy tariffs. In August 2020, Ofgem announced that the Default Tariff Cap would continue to protect default prepayment meter customers after the CMA Prepayment Meter Price Cap expired at the end of 2020. Suppliers can price to the level or below the cap, but cannot charge more.

When is the Default Tariff Cap updated?

Ofgem adjusts the level of the cap twice a year - in February and August to apply in April and October respectively - to reflect the estimated costs of supplying electricity and gas to homes in the next six-month summer or winter period. 

The next price cap period begins on 1 October 2021.

Industry guidance on applying the Default Tariff Cap 

When will the Default Tariff Cap end?

Ofgem will continue to monitor the energy market closely while the Default Tariff Cap is in place and produce an annual report on the competitiveness of the energy market. This annual report will include a recommendation to government on whether they should end or extend the price cap at the end of the year. The government will decide whether to extend the cap for a year. The cap cannot be extended beyond the end of 2023.

Background

Further publications and outputs relating to the development of the cap can be found in the publications feed below.

Need help?

If you have technical or policy questions about the cap, please contact us at retailpriceregulation@ofgem.gov.uk

If you are an energy customer looking to find out your capped tariff price, please contact your energy supplier. You can find their contact information on an energy bill, or see Who is my energy supplier? You can also find answers to frequently asked questions on our consumer FAQ page, or see our energy price caps guide

Publications and updates

  • Published: 22nd Mar 2021
  • Open letters and correspondence
  • 5 Associated documents
Disclosure arrangements for the late-Spring price cap consultations

  • Published: 12th Mar 2021
  • Closing: 13th Apr 2021
  • Consultations and responses
  • 1 Associated documents
We are consulting on whether a float for cap period 7 to adjust the default tariff cap to account for the impacts of COVID-19 is necessary.

  • Published: 2nd Mar 2021
  • Closed: 30th Mar 2021
  • Consultations and responses
  • 1 Associated documents
A call for input on how we should calculate the final costs of COVID-19 for the default tariff cap.

  • Published: 5th Feb 2021
  • Guidance
  • 1 Associated documents
This document provides guidance for industry on the publicly available inputs and sources used for calculating default energy tariff cap models.

  • Published: 5th Feb 2021
  • Open letters and correspondence
  • 10 Associated documents
See the default tariff cap level from 1 April 2021 to 30 September 2021.

  • Published: 2nd Feb 2021
  • Decisions
  • 5 Associated documents
See our decision on changes to ‘Annex 3 – Methodology for determining the Network Cost Allowance’ and the allowance for the Shetland Cross Subsidy in the default tariff cap.

  • Published: 2nd Feb 2021
  • Closed: 2nd Mar 2021
  • Consultations and responses
  • 1 Associated documents
This working paper is another step towards updating the Smart Metering Net Cost Change (SMNCC) allowance in the default tariff cap in time for winter 2021-22.

  • Published: 2nd Feb 2021
  • Closed: 2nd Mar 2021
  • Consultations and responses
  • 1 Associated documents
This working paper is part of the consultation process for setting the PPM level of the smart metering allowance in the default tariff cap and focuses on the rollout aspect of the allowance.

  • Published: 2nd Feb 2021
  • Decisions
  • 2 Associated documents
This letter sets out our decision on how to determine the FIT scheme allowance methodology from cap period six (April 2021 - September 2021) onward.

  • Published: 2nd Feb 2021
  • Decisions
  • 2 Associated documents
See our decision on adjusting the default tariff cap to allow for the recovery of additional debt-related costs as a result of the COVID-19 pandemic, that are not allowed for through the existing cap methodology.

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