What is the energy price cap, and how will it affect me?

Posted 14/12/2018 by E.ON

*The information below was correct as of 6 February 2019. For updated price cap information, please see our latest blog.  

The energy price cap comes into effect on 1st January 2019, but what exactly is it? Here, we explain exactly what the price cap is, and what it could mean for your energy bills.

What is the energy price cap?

The price cap is set by Ofgem, the energy regulator. The cap is a ceiling level for the maximum price customers on a ‘default’ or ‘standard’ tariff will have to pay per year.

How do I know if the cap affects me? 

If you’re one of our customers, and are on our E.ON EnergyPlan tariff – then these changes apply directly to you. 

If you’re with another supplier and haven’t changed supplier for a while, the changes may apply to you too. 

So, read on…

What is the level of the price cap?

There are actually two price cap levels, with one for those who pay by Direct Debit, and another for customers who pay in cash or via cheque. 

 • From 1st January 2019, Ofgem has set the price cap at £1,137 a year. This is for an average household using both electricity and gas and paying by Direct Debit. 

For people who pay by cash or cheque, the cap is slightly higher at £1,221 for an average consuming dual fuel customer, reflecting the fact that it costs more to service customers who pay in this way.  

How do I know what these changes mean for me?

If you’re on E.ON EnergyPlan, you’ll get a letter from us explaining exactly what the changes mean for you.

Is the price cap permanent?

The level of the cap will be reviewed by Ofgem twice a year, with any changes taking effect in April and October. The cap levels may be adjusted, depending on how much it costs to supply your energy. If there are changes, your supplier will contact you to let you know. 

The cap will be in place until at least the end of 2020. This could be extended by Ofgem until the end of 2023.

Is there anything I can to help lower my use and spend?

 Irrespective of the price cap, there are two main things everyone can do to help ensure they’re not using too much energy or paying more than they need to:

1. Regularly check you’re on the best tariff for your needs.

2. Get some extra tips and advice on managing your energy use. We provide lots of energy-saving tools and advice so you can understand your use, and also where your money goes.

 What is the energy price cap, and how will it affect me? Infographic

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