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
- Default tariff cap level: 1 April 2021 to 30 September 2021. Includes levels for the forthcoming restricted charging period and cost allowance methodologies.
- Default tariff cap level: 1 October 2020 to 31 March 2021. Includes levels for the current restricted charging period and cost allowance methodologies.
- Default tariff cap level: 1 April 2020 to 30 September 2020. Includes levels for the previous restricted charging period and cost allowance methodologies.
- Default tariff cap table of public information. Outlines available inputs and sources used to calculate the default energy tariff cap models.
- Ofgem decision to protect consumers with prepayment meters. In August 2020, Ofgem extended the scope of the Default Tariff Cap to ensure the current price protection for default prepayment customers remains in place. These customers are were protected by the CMA Prepayment Meter Price Cap, which expired at the end of 2020.
- Guidance on derogation requests for renewable tariffs. Granted derogations can be found in the publications feed below.
- Capacity market allowance in 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.
- Domestic Gas & Electricity (Tariff Cap) Bill. This put in place a requirement for Ofgem to cap default energy tariffs to 2020.
- Ofgem decision on the design and implementation of the Default Tariff Cap. This decision followed a consultation process which started in March 2018.
Further publications and outputs relating to the development of the cap can be found in the publications feed below.
If you have technical or policy questions about the cap, please contact us at firstname.lastname@example.org
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.