Energy price cap January 2027: how much will bills rise?

Forecasts for January run from about 9% (Cornwall Insight, £1,872, based on 25 August prices) to about 26% (EDF, £2,165); the cluster around £2,150 comes mostly from suppliers, and the one independent forecast in it agrees. Every published forecast points up, but nothing is decided until Ofgem announces the January to March 2027 cap, which it plans to do by 25 November 2026. We will update this guide when Ofgem confirms the figure.

The confirmed number that matters is the October cap: £1,723 a year for a typical dual-fuel household paying by direct debit, from 1 October to 31 December 2026 (up from £1,663 for July to September). October's rise was driven by gas, and panels and batteries only save electricity. A solar quote that only works if January's rise happens is a quote that does not work.

Probably, though the size is open. Wholesale prices did most of the work in October: the wholesale allowance rose 11% (gas 13%, electricity 10%) and now makes up 47% of the direct debit cap, up from 44%. Ofgem blamed Middle East conflict, risk to liquefied natural gas (LNG) supplies, extreme temperatures and low wind, and named no network or policy cost as a driver of the October rise, so if a headline blames green levies, ask for the source.

The October cap rose £60, from £1,663 to £1,723. Ofgem calls that 4%; the arithmetic is 3.6%. On average across Great Britain for direct debit, electricity is 26.32p per kWh plus a standing charge of 54.83p a day. Gas is 7.97p per kWh plus 29.68p a day. Your region's rates will differ, the standing charge especially; they are on your bill and in Ofgem's regional table. The cap limits those rates, not your total bill, so a home using more than typical pays more than £1,723. Payment method matters too: the same cap is £1,861 on standard credit and £1,678 on prepayment.

VAT on household electricity in Great Britain will be zero from 1 October 2026 to 31 March 2027 (electricity in Northern Ireland, and all gas, stay at 5%). Ofgem says the cap would be about £45 a year higher without it. That £45 is an annual rate, so over the six months it is worth about £22.50, or £3.75 a month.

The honest range is about 9% to 26%. At the top, EDF forecasts £2,165 (up 25.7% on £1,723), British Gas £2,160 (up 25.4%) and E.ON Next £2,131 (up 23.7%). MoneySavingExpert's widely quoted £2,152, up 24.9% or £429, is the average of those three rather than a separate forecast. Bloomberg Economics has about £2,150, up about 25% or £427.

Lower down, Oxford Economics said on 10 September that the cap could rise by 13%. Octopus's page shows £1,959, but it was last updated in August. Cornwall Insight forecasts £1,872, up £149 or about 9%, calculated from prices on 25 August and not updated as of 21 September. It predates the September rise in supplier forecasts, so do not read it as the safe number.

Between early and mid September, E.ON Next went from £2,027 to £2,131, EDF from £2,046 to £2,165 and British Gas from £2,065 to £2,160, each up roughly £100. Numbers that move that fast can move back, and their authors admit it: British Gas labels its January figure 'Very Low' confidence, E.ON Next 'Lowest' and Octopus 'Low'.

Some reports call EDF's forecast a 30% rise. That only works against July's £1,663 cap, which £2,165 beats by 30.2%. Against October's £1,723 it is 25.7%. Same forecast, bigger headline.

Note who is speaking. Of the forecasts near 25%, three come from suppliers and one, Bloomberg Economics, is independent, and it lands in the same place. The lower figures are Cornwall Insight's, calculated from 25 August prices before the September rise; Octopus's, last updated in August (Octopus is also a supplier); and Oxford Economics' 13%. So the high cluster is not only a supplier view. It is still a forecast, not a decision.

The same test applies to us. My Energy Expert is free to use. If you choose an installer through us, we receive a referral fee once your installation is completed, so we have an interest in people buying solar and batteries. That is why this guide checks every saving against October's confirmed rates rather than January's forecasts.

Independent forecasters miss too. Cornwall Insight's final November forecasts for January caps have landed close: £1,931 against an actual £1,928 in 2024, and £1,736 against £1,738 in 2025. Its early calls can get the direction wrong. In September 2024 it forecast a 1% fall for January 2025, and the cap rose. For January 2026 even its final forecast, £1,733, pointed down 1%, and the cap rose 0.2% to £1,758. A September forecast is a range, not an answer.

One signal points the other way. On 16 September wholesale gas for summer 2027 traded at about 135p a therm and for winter 2027 at about 127p, well below prices for this winter. Two of the same suppliers forecast the cap easing by July 2027, to £1,901 at E.ON Next and £1,883 at EDF. Futures prices suggest the market expects this spike to ease, though they can move.

Ofgem will announce the cap for 1 January to 31 March 2027 by 25 November 2026 and says it may publish earlier. The last three January caps came on 23 November 2023, 22 November 2024 and 21 November 2025.

The figure rests on wholesale forward prices over a three-month observation window that closes 30 working days before the cap starts. Applying Ofgem's rule gives roughly 19 August to 17 November 2026; MoneySavingExpert uses 18 November. By 21 September about a third of the window had passed, so about two thirds of the prices that set January's wholesale allowance (47% of the October cap) are still to come.

The Autumn Budget on 28 October is where the government has said any further action on bills will be decided, including whether the electricity VAT cut runs past 31 March. No extension had been announced as of 21 September.

Probably not. Split the cap at Ofgem's typical usage. Electricity: 2,500 kWh at 26.32p is £658.00, plus 365 days at 54.83p is £200.13, so £858.13. Gas: 9,500 kWh at 7.97p is £757.15, plus £108.33 of standing charge, so £865.48. Together that is £1,723.61, within a pound of Ofgem's £1,723 (the published rates are rounded). Electricity is half the typical bill, and solar touches only the unit-rate part of that half.

The halves do not move together. In October gas bills rose 8% while homes without gas saw less than 1%, because the VAT cut offset higher electricity costs. Cornwall's January forecast is also gas-led, but less lopsided: electricity from 26.32p to 28.33p (7.6%), gas from 7.97p to 8.94p (about 12%). The supplier forecasts near 25% are quoted as annual bills, so they do not show how the rise splits between gas and electricity.

Then there is the basis trap. On 1 July 2026 Ofgem cut its typical usage from 2,700 kWh of electricity and 11,500 kWh of gas to 2,500 and 9,500. It says the change 'reflects revised assumptions about typical usage rather than a reduction in energy prices'. The same October rates give £1,723 on the new basis and £1,935 on the old, a gap of £212 or 12.3%. Some sites headline £1,935 as confirmed. Ofgem did publish that number, but not as the cap.

Cornwall's January forecast is £1,872 on the new basis and £2,107 on the old: set £2,107 against £1,723 and you get a 22.3% rise that is really 8.7%. In reverse, January 2026's £1,758 was on the old basis, so comparing a new-basis January 2027 figure with it understates the rise. Compare pence per kWh, or annual totals only on the same basis.

Only if it beats the cap on your own usage. If you are already on a fixed tariff, the cap does not change your rates until the fix ends. Ofgem said on 26 August that fixes were available at £100 or more below the October cap. Fix prices move with wholesale prices, and forecasts have risen since, so those deals may have gone. A fix near the October £1,723 cap looks good if January rises 25%, and it would still sit below the forecasts of about £1,900 for July 2027. The risk is a fix priced near January's forecast of about £2,150, which would cost more than the forecasts for summer 2027.

Check five things. First, compare the unit rates and standing charges with your own region's cap rates, which are on your bill and in Ofgem's regional table, rather than relying on the supplier's annual estimate. Second, check the length: a long fix priced at the winter peak can keep you paying winter prices through the summer. Third, check the exit fee.

Fourth, if you have solar, a battery or an EV, check that the fix keeps your export tariff and any time-of-use rate before you sign. Outgoing Octopus's 12p, for example, needs Octopus as your supplier, so moving your import elsewhere can cost you the export rate. Compare import and export together, not the import price alone.

Fifth, a fix does not protect you from the VAT change. VAT is charged on top of the fixed price, so when electricity VAT returns to 5% on 1 April 2027 a fixed bill rises too, unless the Budget extends the zero rate.

Only if it is worth getting at October's prices. Every kWh your panels make and you use saves 26.32p. Every kWh you export earns the export rate, and that has fallen: Outgoing Octopus dropped from 15p to 12p on 1 March 2026, and tariffs that need you to buy your electricity from the same supplier now mostly pay 12p to 13p. Fuse pays 13p to anyone, though its rate is variable. Over a system's life, each £1,000 of cost needs about 3,800 kWh of your own use at 26.32p to pay back, or about 8,300 kWh of exports at 12p. The export cut took 3p off every exported kWh, more than the 2.01p per self-used kWh that Cornwall's January rate would add.

Now the payback. The six to nine years often quoted for a 4kW system at £5,000 to £6,500 assumed 26p import, 15p export and that you use 40% of what the panels make. Take a 4kW system generating 3,400 to 3,800 kWh a year. Without a battery, 40% is optimistic: MCS's own self-consumption tables put a solar-only home of typical size well below it, and the less you use yourself, the longer payback gets. At October's 26.32p and today's 12p export, using 40% gives a payback of about 7.4 to 10.8 years; using a fifth gives about 8.9 to 12.9. None of these allow for panels slowly losing output, a replacement inverter partway through, or the cost of finance. At Cornwall's 28.33p the yearly saving rises about 4.5% at 40% self-use and about 2.7% at a fifth.

Even if the electricity unit rate itself rose 25% to 32.90p, the saving would rise only about 14.8% at 40% self-use, and about 8.9% at a fifth. No published forecast implies that: the forecasts near 25% are for the whole dual-fuel bill, and the only forecast that splits the fuels, Cornwall's, is led by gas. The saving grows more slowly than the rate because exported units are paid at the export rate, which the cap does not set. Payback becomes about 6.5 to 9.4 years at 40%, or 8.1 to 11.8 at a fifth. And those cases assume the higher rate lasts for years; one quarter of it is worth under a quarter of the annual difference, because January to March is one of solar's two weakest quarters.

A typical 2,500 kWh home spends £658 a year on electricity units at 26.32p, so that is the most self-use could ever save it, and solar never touches the £200 standing charge. Generation and self-use vary by roof, region and when you are home, so run yours through our solar estimator and try it with a lower self-use share.

If you already have solar, the export tariff matters more than the cap. Per 1,000 kWh exported, 12p earns £120 (12p needs Octopus as your supplier) and Octopus's open 4.1p rate earns £41, a £79 gap. Even in the 32.90p stress test above, each 1,000 kWh you use yourself would save only £65.80 more. On the same volume the export gap is bigger, and without a battery it applies to most of what your panels make. Open default rates (Octopus 4.1p, OVO 4p, EDF 3p, Outfox 1.05p) are money to recover now: Fuse pays 13p to anyone, without you switching supplier.

Slightly, and only if the gap between night and day rates widens. On variable Octopus Go the night rate is 8.625p and the day rate 29.42p to 32.28p depending on region. These Go rates include 5% VAT, which comes off electricity from 1 October; the cap's 26.32p already has none. If Octopus only removes VAT, they become about 8.21p at night and 28.02p to 30.74p by day (our own calculation), a gap of about 19.8p to 22.5p. Variable Go usually reprices when the cap changes, so the real October rates may differ, and every figure below moves with them. The catch is that on Go, every daytime unit the battery does not cover costs more than the standard cap rate would; check your region's Go day rate against the cap rate on your bill.

Here is the ceiling. A 5kWh battery emptied fully every day shifts at most 1,825 kWh a year; at a 19.8p to 22.5p gap that is about £360 to £410. That is a theoretical maximum, before round-trip losses, partial cycling and the cost of fitting, so do not divide a quote by it and call the answer a payback: a real battery saves less, and a fitted one pays back far more slowly than that sum suggests. Check who stands behind the warranty, not just its length. A typical 2,500 kWh home uses only about 6.8 kWh a day, so a 10kWh battery is bigger than its whole daily use. Our battery finder sizes storage to your own usage, not the biggest box.

In January, if day and night rates rise by the same percentage, a 25% rise in electricity rates (a stress test; no published forecast implies it) widens the 19.8p Go gap to about 24.8p; if they rise by the same pence, the gap does not move. Night power is bought on the same wholesale market, so the most flattering sum an installer can show, day rate up 25% and night rate frozen, is also the least likely.

Expect 'prices are going up, sign today' from now until 25 November. The test that kills it: ask every installer for payback at October's 26.32p cap rate, today's 12p export and the annual kWh on your own bill. If the quote only works at 32.90p or with a usage figure bigger than yours, it does not work. If it assumes an export rate above 13p, ask who pays it, whether it is available to you, whether it needs that supplier's import tariff or its own installation, and how long it is fixed. Rates above 15p exist, but only where the supplier installed the system. A genuine deal survives being checked next week. Run it through our quote checker too: a quote just 5% above a fair price costs as much as the April VAT change.

That VAT deadline is real. Installing solar panels and batteries is zero-rated until 31 March 2027 and goes to 5% (not 20%, as some pages claim) from 1 April. On a £5,000 to £6,500 4kW system that is £250 to £325; on a £9,000 to £12,000 solar and battery system, £450 to £600. Ask the installer in writing which VAT rate the quote assumes and who pays the difference if fitting slips past 31 March. The same day, electricity VAT is due back at 5% (on its own, 26.32p becomes about 27.64p) and Ofgem adds a Bill Discount Scheme allowance to the electricity cap. That is a fair reason to decide by spring, not to sign this week.

Around 1 October, take a meter reading on 30 September or 1 October, with a dated photo if you have no smart meter, and note your unit rate, annual kWh and export tariff. In October, check that your bill shows 0% VAT on electricity. On 28 October, watch the Budget for any extension to either VAT zero rate. By 25 November, ignore the annual total, compare the new electricity unit rate and standing charge with your region's October rates, and multiply the difference by your own kWh.

On 31 December, take another meter reading, so December's use is billed at December's rate, and judge any fix against the confirmed January rate, not a forecast. Ofgem announces the April cap by 23 February 2027. On 31 March, take a last reading before electricity VAT returns. If January's bills look unmanageable, ask your supplier about its hardship fund, check whether you qualify for the Warm Home Discount, and talk to Citizens Advice before you fall behind. If you want solar or a battery, get quotes now and judge them on today's numbers, so that in November you are deciding rather than reacting.

Last updated 21 September 2026. We will update this guide when Ofgem confirms the January figure, due by 25 November 2026. Figures we worked out ourselves are marked as our own calculation or shown with the working.

Ofgem: the October 2026 price cap press release, the October to December 2026 rates news page and summary of changes (all 26 August 2026); the energy price cap unit rates and standing charges page; the review of typical domestic consumption values decision (27 May 2026); the May 2022 price cap indexation guidance; the Bill Discount Scheme cost allowance decision (26 August 2026); the January 2026 cap press release; and the Smart Export Guarantee annual report.

Government: SI 2026/987 on legislation.gov.uk (the electricity VAT zero rate); the GOV.UK announcement of the cut (21 July 2026); HMRC VAT Notice 708/6 on energy-saving materials; and the OBR's Autumn 2026 forecast date.

Forecasts: Cornwall Insight's price cap predictions page (last updated 26 August 2026) and its past final January forecasts; E.ON Next's predictions (updated 15 September 2026); British Gas's price cap page (updated 14 September 2026); EDF's forecast as shown by MoneySavingExpert (15 September 2026); MoneySavingExpert's price cap prediction (16 September 2026); Bloomberg Economics (15 September 2026), as reported by OilPrice.com; Oxford Economics via PA (10 September 2026); Octopus's price cap predictions page (August 2026); earlier September supplier forecasts as collected by the HomeOwners Alliance (7 September 2026).

Tariffs and markets: Octopus's Outgoing Octopus notice and published tariff data (21 September 2026), including Intelligent Octopus Go Fixed and Go Fixed (18 September 2026); OVO's Smart Export Guarantee page; MoneySavingExpert's export tariff comparison (14 September 2026) and suppliers' own export tariff pages, including Fuse Energy's; Sunsave's export tariff comparison (16 September 2026); and Flagship Energy's markets update via Energy Live News (16 September 2026).