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: 7th Aug 2019
  • Decisions
  • 1 Associated documents
Decision for our approach to setting the smart metering (SMNCC) allowance and Capacity Market allowance for the third cap period of the default tariff cap.

  • Published: 1st Aug 2019
  • Decisions
  • 1 Associated documents
See our decision to issue Green Energy UK Plc an enduring derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 1st Aug 2019
  • Decisions
  • 1 Associated documents
See our decision to issue Good Energy Limited and Good Energy Gas Limited an enduring derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 1st Aug 2019
  • Decisions
  • 1 Associated documents
See our decision to issue The Renewable Energy Company Limited (Ecotricity) an enduring derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.

  • Published: 18th Jun 2019
  • Closed: 16th Jul 2019
  • Consultations and responses
  • 8 Associated documents
A consultation on our approach to the smart metering and Capacity Market allowances for the third period of 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: 1st Jan 2019
  • Charts and data
  • 1 Associated documents
This spreadsheet contains data comparing the standard variable tariffs of the six larger suppliers to the default tariff cap had it applied since April 2015.

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