# What is on your energy bill

The Ofgem price cap for a typical dual fuel bill is not one number, it is a stack of cost allowances Ofgem sets every three months. For July to September 2026 the typical bill is 1,862 pounds a year on the basis comparable with earlier quarters, or 1,663 pounds on Ofgem's newly lowered usage assumption. Wholesale energy is now 45 per cent of that bill, environmental and social policy costs recovered through energy bills are heading from about 14 billion pounds to about 18.5 billion pounds a year by 2030-31 on OBR figures, and a quiet change in April 2026 cut the typical domestic policy allowance by 55 per cent almost unnoticed.

Source page: https://britishresilienceindex.com/deep-dive/energy-bill-breakdown
Machine readable data: https://britishresilienceindex.com/data/deep-dive/energy-bill-breakdown.json

## How to read this

Figures are Ofgem's own default tariff price cap cost allowance model for a typical dual fuel household paying by direct debit, Great Britain. The cap sets a maximum unit price and standing charge, not a maximum bill: what any household actually pays depends on how much energy it uses. Two bill totals are shown for the current quarter because Ofgem changed its typical usage assumption on 1 July 2026; the cost component breakdown uses the older, still-comparable usage basis so it lines up with the previous quarter's own published breakdown.

## 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.

- **Period**: July to September 2026
- **Total gbp**: 1,862
- **Total gbp new basis**: 1,663
**Components**

| name | pct | gbp |
|---|---|---|
| Wholesale energy, including contracts for difference | 45 | 838 |
| Network costs | 25 | 466 |
| Operating, debt and industry costs | 16 | 298 |
| Policy costs | 6 | 112 |
| Earnings before interest and tax (EBIT) allowance | 2.6 | 48 |
| Headroom allowance | 1 | 19 |
| Levelisation allowance | 0.5 | 9 |
| VAT | 5 | 93 |

- **Components gbp sum**: 1,883
- **Prior period**: April to June 2026
- **Prior total gbp**: 1,641
**Prior components**

| name | pct | gbp |
|---|---|---|
| Wholesale energy, including contracts for difference | 40 | 656 |
| Network costs | 28 | 459 |
| Operating, debt and industry costs | 17 | 279 |
| Policy costs | 6 | 98 |
| Earnings before interest and tax (EBIT) allowance | 2.6 | 43 |
| Headroom allowance | 1 | 16 |
| Levelisation allowance | 0.6 | 10 |
| VAT | 5 | 82 |

## 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.

**Series**

| year | totalBn | domesticBn | nonDomesticBn |
|---|---|---|---|
| 2025-26 | 13.99 | 5.39 | 8.6 |
| 2026-27 | 15.94 | 6.29 | 9.65 |
| 2027-28 | 15.36 | 5.96 | 9.41 |
| 2028-29 | 15.95 | 6.16 | 9.79 |
| 2029-30 | 16.74 | 6.43 | 10.3 |
| 2030-31 | 18.51 | 7.05 | 11.46 |

- **Start year**: 2025-26
- **End year**: 2030-31
- **Start bn**: 13.99
- **End bn**: 18.51
- **Domestic share pct**: 34.66
- **Non domestic share pct**: 65.34

## 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.

- **Prior period**: January to March 2026
- **New period**: April to June 2026
- **Prior gbp**: 236
- **New gbp**: 106
- **Change gbp**: -130
- **Change pct**: -55

## 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.

- **Elec pence per kwh**: 26.11
- **Gas pence per kwh**: 7.33
- **Elec standing pence per day**: 57.19
- **Gas standing pence per day**: 29.04
- **Ratio**: 3.56
**On electricity only**

- Renewables Obligation
- Contracts for Difference
- Capacity Market
- Sizewell C RAB levy

**On gas only**

- Green Gas Levy

## 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.

## For what is on your bill

- Wholesale energy costs rose from 40 to 45 per cent of the bill in a single quarter. How much of that reflects genuinely higher global gas prices, and how much reflects the mechanics of a cap that resets every three months on a trailing wholesale price?
- The domestic policy allowance fell 55 per cent in April 2026 with comparatively little public attention, because the Renewables Obligation and Energy Company Obligation costs moved to general taxation rather than disappearing. Who ends up paying more as a result, and is that shift well understood?
- This page's non-domestic share of environmental levies, about two thirds, is a volumetric proxy, not an audited figure, and does not account for energy intensive industry exemptions. Should DESNZ or Ofgem publish an authoritative domestic and non-domestic pound split for these levies?
- Contracts for Difference and the Capacity Market sit inside the price cap's 'Wholesale' allowance rather than its 'Policy' allowance. Does describing them as wholesale costs rather than policy costs affect how the public and policymakers judge the merits of the schemes that created them?

## Sources

- Energy price cap (default tariff) update from 1 July 2026, cap period 16b (Ofgem) (https://www.ofgem.gov.uk/sites/default/files/2026-06/Summary-of-changes-to-energy-price-cap-1-July-to-30-September-2026.pdf) · Crown copyright
- Energy price cap (default tariff) update from 1 April 2026, cap period 16a (Ofgem) (https://www.ofgem.gov.uk/sites/default/files/2026-02/Summary-of-changes-to-energy-price-cap-1-April-to-30-June-2026.pdf) · Crown copyright
- Energy price cap unit rates and standing charges (Ofgem) (https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap-unit-rates-and-standing-charges) · Crown copyright
- Economic and fiscal outlook, March 2026: detailed forecast tables, receipts, table 3.20 'Environmental levies' (OBR) (https://obr.uk/efo/economic-and-fiscal-outlook-march-2026/) · Open Government Licence v3.0
- Digest of UK Energy Statistics (DUKES) 2025, Chapter 5: Electricity (DESNZ) (https://assets.publishing.service.gov.uk/media/688a28656478525675739051/DUKES_2025_Chapter_5.pdf) · Open Government Licence v3.0
- Energy bills in Great Britain: the price cap and household debt (British Resilience Index deep-dive) (https://britishresilienceindex.com/deep-dive/energy-bills) · Open Government Licence v3.0
- Fuel poverty in England (British Resilience Index deep-dive, DESNZ data) (https://britishresilienceindex.com/deep-dive/fuel-poverty) · Open Government Licence v3.0

## Caveats and data notes

- The price cap sets a maximum unit price and standing charge, not a maximum bill: a household that uses more energy than the Typical Domestic Consumption Value pays more than the figures on this page, and one that uses less pays less.
- Ofgem changed its Typical Domestic Consumption Value on 1 July 2026, lowering assumed usage. The current quarter's total bill is shown on both the new basis (1,663 pounds, what bills are actually calculated from) and the older basis (1,862 pounds, comparable with the previous quarter); the cost component breakdown on this page uses the older basis because that is the basis Ofgem itself used in its percentage cost breakdown table for this quarter.
- The pound values behind each cost component for the current quarter are this page's own calculation (percentage share multiplied by the total bill), because Ofgem's July 2026 update letter published only percentages for this quarter, not pounds. Ofgem's own percentages are independently rounded and sum to about 101 per cent of the total bill, so the derived pound figures do not sum exactly to the total either; this is a rounding artefact in Ofgem's source table, not an error in this page's arithmetic.
- Figures are for Great Britain and for direct debit dual fuel customers, the most common payment method; standard credit and prepayment customers pay somewhat different amounts and have their own cost breakdowns published by Ofgem in the same letters. Regional unit rates also vary; the rates shown here are the GB average.
- The environmental levies total (13.99 to 18.51 billion pounds) is the OBR's whole GB forecast for these schemes, not a domestic-bill-only figure; most of it is recovered from both domestic and non-domestic energy bills, allocated here by a volumetric proxy method (see the policy cost section), not an official scheme by scheme split, which DESNZ and Ofgem do not publish.
- The Warm Home Discount is a domestic-only rebate scheme by design and is excluded from the domestic and non-domestic volumetric split; it is counted entirely on the domestic side in the chart on this page.
- Energy intensive industries receive partial to near full exemption or compensation from some of these levies (Renewables Obligation, Feed-in Tariff legacy costs and Contracts for Difference) under long-standing DESNZ compensation schemes. This page does not quantify that exemption, so its non-domestic share is an upper bound and its domestic share correspondingly a lower bound on the true burden actually falling on businesses outside those schemes.
- The underlying source PDFs and the Ofgem cost allowance model spreadsheet used to cross-check the electricity/gas unit rate ratio are archived in this project's data folder alongside the build script for this page.

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British Resilience Index, a non-partisan UK civic data project. Every figure is
reconciled to its primary official publisher before it is shown. Free to cite with
attribution: https://britishresilienceindex.com