Solar & battery · 4 min read
Energy Price Cap Set to Rise in January: How Solar and Battery Storage Can Protect Your Bills
The energy price cap rose again on 1 October, and the forecasts for January look worse. With Ofgem due to confirm the new cap by 25 November, many households are bracing for a more expensive winter. Here’s what’s being predicted, what the cap does and doesn’t cover, and how generating and storing your own electricity can take some of the sting out of it.
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Where the price cap stands now
Ofgem’s cap for 1 October to 31 December 2026 is £1,723 a year for a typical dual-fuel household paying by Direct Debit. That figure is a benchmark, not a limit on your total bill: the cap sets the maximum unit rates and standing charges suppliers can charge, so what you actually pay still depends on how much energy you use.
What’s expected in January
Ofgem will announce the cap for January to March 2027 on or before 25 November, and nothing is confirmed until then. The forecasts, however, point upwards:
- Cornwall Insight has forecast around £1,872
- The average of forecasts from British Gas, EDF and E.ON Next works out at about £2,117
- EDF has projected as much as £2,165, which would be around £442 more than the current cap
Analysts link the expected rise to continuing pressure on wholesale energy prices from the conflict in Iran. These are forecasts, not guarantees, and the final figure could land higher or lower as wholesale prices move through the assessment period, which runs into November.
What the cap doesn’t protect you from
The price cap only applies to standard variable tariffs. If you’re on a fixed deal, your rate stays put until the term ends, but you’ll be facing today’s market prices again when it does. Either way, you’re still buying every unit of electricity from the grid at whatever the going rate is. The only way to stop being exposed to that is to buy fewer units.
How solar reduces your exposure
Every kilowatt-hour your panels generate and you use in the home is one you don’t buy from your supplier. That’s worth more when the unit rate goes up, so the higher the cap rises, the more each self-generated unit is worth to you. Solar generates less in winter, and we’d rather tell you that than oversell it, but the spring-to-autumn months add up, and panels keep producing on bright winter days too.
Why a battery makes the difference
Without storage, much of what your panels generate during the day goes unused while you’re out, and you then buy power back in the evening at full price. A battery stores that surplus for when you need it, so you use more of your own generation and buy less from the grid. It can also charge from the grid on a cheap overnight tariff in winter, when your panels produce little, and run the house at peak times. Add an export tariff under the Smart Export Guarantee and any surplus you can’t use earns you money instead of going to waste.
The 0% VAT window is still open
Solar panels and battery storage currently qualify for 0% VAT, but only until 31 March 2027. Installations take time, from survey and design through to booking a date, and demand tends to build as a deadline approaches. If you want a system working before the end of the VAT relief, now is the time to start the conversation.
What to do next
You don’t need to guess what the cap will do. A free survey will show you what a system could generate on your roof, how much of that you’d use, and what it would be worth at today’s prices and at higher ones. Get in touch with our team for a free, no-obligation quote.
Sources: IBTimes January cap forecasts, Uswitch January price cap outlook