The energy price cap hit £1,736 in April 2026, 8% higher than the same month last year. Ofgem’s final review, published this month, will reshape how that number is calculated from 2027 onwards.
As reported by Dentons, the review focuses on network charging reform and retail market resilience, two areas that directly hit household bills. But the direction of travel matters more than the headline numbers.
Who pays for the grid, and who should
Network charges currently make up 18% of a typical dual-fuel bill, about £312 a year for a 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity. Ofgem’s proposal shifts more of that cost onto gas connections. The logic: as heat pumps and EVs increase electricity demand, the grid needs investment, but charging it all to electricity penalises the early adopters the government wants.
The catch is timing. Households still on gas boilers, roughly 23 million homes, will see network charges rise by an estimated £30-50 annually from 2028. Those who have already installed a heat pump under the Boiler Upgrade Scheme could save £40-60 a year on the same charges. The gap widens if you drive an EV and charge at home.
Supplier resilience, fewer options, more protection
Ofgem also tightens the financial rules for energy suppliers. The 2021-22 crisis saw 29 suppliers collapse, costing the market £2.7 billion, much of it passed to households via the price cap. The new rules require suppliers to hold more capital and hedge further ahead.
But the trade-off is real. Fewer suppliers means less competition on fixed deals. The number of active suppliers has already fallen from 49 in 2021 to 26 today. Households who switch annually may find fewer cheap fixes available. The benefit: lower risk of being dumped onto a costly default tariff if your supplier fails.
What it means for your EPC and upgrade timeline
The network charge shift effectively adds a hidden tax on gas and a subsidy for electricity. For a household planning a heat pump installation, the payback period shortens by roughly 6-12 months under the new charging structure, depending on your current gas use and electricity tariff.
But the review does nothing to address the upfront cost. A heat pump installation still runs £7,000-13,000 after the £7,500 BUS grant. The Energy Saving Trust estimates a typical 3-bed semi saves £200-400 a year switching from gas to a heat pump at current prices. The network charge reform adds another £40-60 to that saving from 2028.
Ofgem has not confirmed when the new charging structure takes effect. The consultation closes in September 2026, with implementation expected in April 2027 or 2028. Households on standard variable tariffs can expect a letter from their supplier outlining the impact within six months of the final decision.
The bottom line: if you are considering a heat pump, the regulatory direction is clear, electricity will get cheaper relative to gas. But the savings are back-loaded. Your decision should still hinge on your property’s insulation and your heating habits, not on a regulator’s consultation timetable.
Frequently Asked Questions
If your home uses gas for heating, your bill could rise by £30-50 annually from 2028 due to network charge rebalancing. Homes with heat pumps and EVs may see a net saving of £40-60 on electricity network charges.
Ofgem's consultation closes in September 2026. Implementation is expected in April 2027 or 2028. Households will receive notification from their supplier at least three months before any changes apply.
