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 April 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: 17th Jun 2020
  • Closed: 15th Jul 2020
  • Consultations and responses
  • 9 Associated documents
This letter outlines the options available for calculating the Feed-in Tariff (FIT) allowance in the default tariff cap, including Ofgem’s preferred option, which will be applied from the fifth charge period. This comes as a result of the previously used...

  • Published: 5th Jun 2020
  • Closed: 3rd Jul 2020
  • Consultations and responses
  • 4 Associated documents
This letter outlines our proposed changes to the model set out in Annex 5 to add new input rows for PPM non-pass-through SMNCC and to clarify the source of SMETS2 meter volumes used to determine the communications hubs fixed charge element of DCC charges.

  • Published: 18th May 2020
  • Closed: 26th Jun 2020
  • Consultations and responses
  • 12 Associated documents
A statutory consultation covering our proposals on adjusting the default tariff cap based on our reassessment of the wholesale allowance in the first default tariff cap period.

  • Published: 18th May 2020
  • Closed: 26th Jun 2020
  • Consultations and responses
  • 17 Associated documents
A statutory consultation in which we consult stakeholders on how we propose to protect consumers with a prepayment meter after the PPM cap expires.

  • Published: 18th May 2020
  • Closed: 26th Jun 2020
  • Consultations and responses
  • 12 Associated documents
A statutory consultation on proposals to adjust the non-pass-through Smart Metering Net Cost Change (SMNCC) allowance in the default tariff cap, which accounts for the net impact of the smart meter rollout on suppliers’ efficient operating costs.

  • Published: 21st Apr 2020
  • Open letters and correspondence
  • 5 Associated documents
Disclosure arrangements for our May 2020 statutory consultations on changes to the default tariff cap.

  • Published: 13th Mar 2020
  • Decisions
  • 2 Associated documents
Our decision on the process for modifying the Default Tariff Cap

  • Published: 10th Mar 2020
  • Closed: 8th Apr 2020
  • Consultations and responses
  • 13 Associated documents
A policy consultation in which we consult stakeholders on whether PPM customers will require protection after the PPM cap expires, and of so, how we might protect them.

  • Published: 7th Feb 2020
  • Open letters and correspondence
  • 9 Associated documents
You can view all historical information and publications relating to the design of the cap on our policy pages for the Default Tariff Cap.

  • Published: 31st Jan 2020
  • Closed: 2nd Mar 2020
  • Consultations and responses
  • 8 Associated documents
This consultation sets out our approach and initial thinking on several of the analytical challenges involved in reassessing the wholesale allowance in the first default tariff cap period.

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