What is price cap

[aquamarine2]

Can anyone clarify. Does the price cap determine how much energy companies can charge per kwh, or how much they can charge per year. Very conflicting advice online. And if it is how much they can charge per year surely that differs with how much you use. Sorry to be thick but am really confused with it all as i am currently shopping around for best deal as have been on cheap fix throughout all the price rises

It is how much energy companies can charge per kwh,

How much you use is how much you pay

It is the max amount that they can charge per unit & standing charge.

You then pay for however much you use.

The price cap is the maximum you will pay per kwh and for the standing charge. If you use more energy you will pay more.

This might help make things clearer for you.
https://www.moneysavingexpert.com/news/2024/02/energy-bills-to-fall-as-new-price-cap-announced/#:~:text=MoneySavingExpert.com%20founder%20Martin%20Lewis%20said%3A%20The%20Energy%20Price,tariff%29%20as%20most%20firms%20just%20charge%20the%20max.

Gives the average price cap from April 2024

It's kWh. The figure you usually see is not a cap as such it's what the average household would get charged a year but most household will be above that or below that depending on usage. The cap is on kWh.

Per Kw. The numbers like £2000/£2500 per year are just examples for an average house hold so on our household bill with the cap our annual bill is £1800 ish because were a small house and use less than most

Thanks to you all! This is what I thought. I'm thinking eon pledge fixed 3% below price cap but thanks to you I am better prepared to shop around xxx

Following on from the above. I am on economy 7 with a Meter that has both day and night readings and on a variable tariff currently.

I have noticed that the price per kwh is above the price cap. Day price for electric is 28p and night rate 15p. Standing charge 63p for electric and 31p for gas.

Surely being above the price cap is not right?

Who is your supplier? I used to be with a Green energy company who were exempt from the price cap so I was always charged higher than it.

The price cap figures given are average so different areas can vary by a few p above or below the price cap.

British gas. Shopping around but noticed this when looking at what deals they had to offer...

Am waiting for an explanation from them but as usual with British gas it is taking ages

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/get-energy-price-cap-standing-charges-and-unit-rates-region

Shows different price by region

I'm south west which is lower than what they are charging

As pp the exact price can vary regionally, but also the price cap has been reduced as of 1st April so your rates showing on your meter appear to be the pre April rates. If you pay by direct debit your energy company should adjust at their end.

I'm on economy 7 too OP.

The energy company can split the day and night rate how they like, but the cost to an average family on e7 can't be more than the price cap cost to an average family on single rate. Or something.

Ofgem explain it a bit here, scroll down a bit. https://www.ofgem.gov.uk/information-consumers/energy-advice-households/economy-7-consumer-guide

Because the night rate is below the cap price, the day rate can be above.

You can be charged above price cap on a fixed rate tarriff because it is your choice to accept them prices. The price cap only applies to a variable tariff.

We have been with octopus for a year or so. About Two months ago we switched to their tracker tariff. It’s a bit of a risk because the prices could rocket, but so far we have been paying loads less. Today was 11.7p per kWh and tomorrow is 12.7. It basically tracks the wholesale price.
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