What is on your energy bill

The bill now, taken apart

A 1,862 pound bill is eight separate Ofgem allowances

For July to September 2026, the typical direct debit dual fuel bill under the Ofgem price cap is 1,862 pounds a year on the usage basis comparable with earlier quarters (1,663 pounds on Ofgem's newly lowered usage assumption, in force from 1 July 2026). Ofgem builds that figure from eight cost allowances, published as percentages of the total bill. Wholesale energy, including the cost of Contracts for Difference payments to low carbon generators, is now the largest single share at 45 per cent, up from 40 per cent the previous quarter as wholesale gas prices rose. The pound figures below are this page's own calculation, each percentage multiplied by the total bill; Ofgem's own published percentages are independently rounded and sum to about 101 per cent, so these pound figures do not sum exactly to the total either, by design.

Pound figures are each percentage multiplied by the total bill (this page's own calculation); Ofgem's published percentages sum to about 101 per cent, so the pound figures above sum to £1,883, not exactly the £1,862 total. See caveats.

The policy cost story

Levies on bills are rising toward 18.5 billion pounds a year

Separate from the price cap's own 'Policy' cost line (which is one allowance among the eight above) is the wider set of environmental and social levies the government has decided to recover through energy bills, or through general taxation instead. The OBR's own verified forecast puts the total cost of these levies, Renewables Obligation, Contracts for Difference, the Capacity Market, the Warm Home Discount, the Green Gas Levy and the Sizewell C financing levy combined, at 13.99 billion pounds in 2025-26, rising to 18.51 billion pounds by 2030-31, an increase of about a third. Contracts for Difference and the Capacity Market do not sit inside the price cap's 'Policy' line at all: Ofgem books them inside the larger 'Wholesale' allowance instead, so a levy total built from the cap's own cost breakdown would understate the true policy burden.

Who actually pays is not published by DESNZ or Ofgem scheme by scheme. This page allocates the volumetric levies (Renewables Obligation, Contracts for Difference, the Capacity Market, the Green Gas Levy and the Sizewell C levy) between domestic and non-domestic bills in proportion to each sector's share of billed electricity consumption: 94.4 terawatt hours domestic against 178.0 terawatt hours non-domestic, 34.66 per cent against 65.34 per cent, from DESNZ's 2025 Digest of UK Energy Statistics. The Warm Home Discount is held out of that split and counted entirely as a domestic cost, since it is a domestic-only fuel poverty rebate by scheme design. This is a simplifying proxy, not an audited scheme by scheme allocation: DESNZ and Ofgem do not publish one, and energy intensive industries receive partial to near full exemption from some of these levies, which this method cannot capture, so the non-domestic share shown here is best read as an upper bound.

What changed in April 2026, almost unnoticed

The domestic policy allowance fell from 236 to 106 pounds

Ofgem's price cap 'Policy' cost allowance for a typical direct debit customer fell from 236 pounds a year (January to March 2026) to 106 pounds a year (April to June 2026), a fall of 130 pounds, 55 per cent, and it has stayed at that lower share since: both quarters since have kept Policy costs at about 6 per cent of the bill. Ofgem's own letter states the cause directly: measures announced at UK Budget 2025 took effect on 1 April 2026, cutting the Renewables Obligation allowance on bills by 75 per cent and moving the Energy Company Obligation and the Great British Insulation Scheme off bills altogether, funded instead from general taxation. Because this was delivered through a routine quarterly cap update rather than announced as a bill cut in its own right, it passed with comparatively little public attention despite being one of the larger single changes to what is on a typical bill this year.

Electricity costs more than three times as much per unit as gas

26.11 pence per kWh for electricity against 7.33 pence for gas

Under the current price cap, July to September 2026, the GB average direct debit unit rate is 26.11 pence per kilowatt hour for electricity against 7.33 pence for gas, including VAT, a ratio of 3.56 to one. Daily standing charges are closer together: 57.19 pence for electricity against 29.04 pence for gas. The two fuels also carry different policy levies. Renewables Obligation, Contracts for Difference, the Capacity Market and the Sizewell C financing levy are all electricity-only costs, recovered from electricity suppliers; the Green Gas Levy, which funds biomethane injection into the gas grid, is the one levy that sits on gas bills instead. This is part of why a home that switches heating from gas to electricity, such as with a heat pump, faces a much higher price per unit of delivered heat, even though electricity carries more of the policy cost of decarbonising the grid.

Related on this site

The bill total over time, and who cannot afford to pay it

This page decomposes a single quarter's bill into its cost components. For how the total bill has moved since the price cap began in January 2019, including the Energy Price Guarantee crisis peak and household energy debt, see the energy bills deep-dive. For who cannot afford to keep warm at all, see the fuel poverty deep-dive. See the energy bills deep-dive → · See the fuel poverty deep-dive →

Questions this raises

For what is on your bill