What October’s Energy Price Change Means for Home Energy
The energy price cap changes on 1 October 2026, and whilst the government has tried to support households by making electricity temporarily VAT free for at least the next six months, for the average household this still means an annual increase of up to £400 on their energy bills. Those on oil and LPG will still be paying an even higher premium due to the current global unrest, adding further pressure to household energy costs.
The headline cap rises by 4% to £1,723 a year for a typical dual-fuel household paying by Direct Debit, although it is important to remember that every household’s actual bill will still depend on how much energy it uses.
What does the change mean for you?
The underlying rates move differently, with average electricity rising only slightly from 26.11p to 26.32p per kWh, while gas rises from 7.33p to 7.97p per kWh. At the same time, the electricity standing charge falls, and electricity will be temporarily free of VAT from October 2026 to March 2027.
For homeowners, these figures provide a useful indication of how energy costs are changing, but they are not the complete calculation when it comes to understanding what it could cost to run your home in the future.
For anyone considering renewable home energy, the price of electricity is only one part of the equation, because the way your home generates, stores, and uses energy can have just as much influence on your overall costs.
A heat pump uses electricity far more efficiently than direct electric heating and can be up to five times cheaper to run when replacing an electric boiler.
When replacing a gas boiler, the cost comparison is less straightforward. Although a heat pump uses energy more efficiently, electricity currently costs more per unit than gas, so the overall running cost will depend on the property, the system’s efficiency and the household’s tariff.
However, the property, system efficiency, tariff, and household routine all affect the result, which is why looking at each technology separately does not necessarily provide a complete picture of how much a home could save or how an energy system will perform.
Looking at the whole home
This is where the Heat Horizons whole-home approach comes in. For homeowners considering changes to their heating or energy systems, it is increasingly important to look beyond individual products and consider how the different components can work together.
The property itself, its heating requirements, how the household uses energy throughout the day and the way different technologies can work together all form part of the calculation.
A well-considered home-energy plan looks at both the heating solution as well as the longer term. So, considering the property, the heating system, energy generation, battery storage, controls, tariffs, and the way the household uses energy.
At Heat Horizons, that is the approach we take. We bring these factors together to design a home energy solution around the individual property and the people living in it, rather than judging each component separately.
Source: Ofgem press release: Energy price cap will rise 4% from October 2026