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. Suppliers can price to the level or below the cap, but cannot charge more.

A separate price cap applies to customers on prepayment meter tariffs.

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. 

We will reset the level of the cap on 7 August for the six-month winter price cap period which begins on 1 October.

Industry guidance on applying the Default Tariff Cap 

When will the Default Tariff Cap end?

The cap will be in place until at least the end of 2020. The government will decide whether to extend the cap beyond this, up to a maximum of 2023. 

We 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.

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: 29th Mar 2019
  • 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: 21st Mar 2019
  • Decisions
  • 2 Associated documents
See our decision to issue Green Energy UK Limited an extension to the temporary derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 21st Mar 2019
  • Decisions
  • 2 Associated documents
See our decision to issue Good Energy Limited and Good Energy Gas Limited an extension to the temporary derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 21st Mar 2019
  • Decisions
  • 2 Associated documents
See our decision to issue The Renewable Energy Company Limited (Ecotricity) an extension to the temporary derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 14th Mar 2019
  • Open letters and correspondence
  • 1 Associated documents
This letter outlines our plans for reviewing smart metering costs to set the Smart Metering Net Cost Component in future default tariff cap periods.

  • Published: 7th Feb 2019
  • Open letters and correspondence
  • 10 Associated documents
Updated levels of the Default Tariff Cap and associated documents for the second charge restriction period (1 April 2019 – 30 September 2019).

  • Published: 7th Feb 2019
  • Decisions
  • 1 Associated documents
Decision to include a full Capacity Market allowance within the default tariff cap in the second cap period.

  • Published: 15th Jan 2019
  • Open letters and correspondence
  • 15 Associated documents
This letter outlines our approach to the capacity market calculations in the default tariff cap for the next price cap periods.

  • Published: 18th Dec 2018
  • Charts and data, Guidance
  • 2 Associated documents
View the energy price cap levels set for default energy tariffs (including standard variable tariffs), alongside worked examples of capped tariff calculations.

  • Published: 6th Nov 2018
  • Decisions
  • 23 Associated documents
Our decision on the methodology to implement a Default Tariff Cap and the associated Licence Conditions.

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