The price cap limits what a supplier can charge for each unit of electricity and gas and is set by the Government.
Top Facts…
- It only applies to default or standard tariffs, often known as standard variable tariffs and does not apply to fixed period tariffs.
- The cap applies regardless of your meter or payment type.
- The price cap doesn’t cap your total energy bill – because your total bill depends on how much energy you use. The more you use, the more you pay and vice versa.
- The price cap sets a maximum rate for each unit of electricity and gas, and the daily standing charge. It was introduced in 2019 to prevent people from being over charged for their energy - standard tariffs were traditionally more expensive than the markets cheapest deals and whilst some customers regularly changed suppliers or tariffs to get the best deal, a lot of customers were not able to.
- The price cap is linked to wholesale prices which have increased due to a number of factors, the Russian invasion of Ukraine, shortage of gas supply etc.
You can read more about the price cap and current price cap rates here