Octopus Energy customers will not face higher bills when the energy price cap rises slightly from January 1st, the company confirmed. The energy supplier is absorbing the increase, keeping typical household payments at October levels despite Ofgem's announcement of higher standing charges and electricity rates.
The development comes as both Octopus and British Gas committed to pass on savings of up to £134 per household from April 2026, following government policy changes outlined in the Autumn Budget. The adjustments aim to address spiralling energy bills by removing "legacy costs" and environmental levies from electricity prices.
Greg Jackson, CEO of Octopus Energy, told customers in an email: «Ofgem delivered mixed news in their recent energy price cap announcement. Gas unit rates will fall from January 1, which will help a lot of homes during the coldest months of the year. However, higher standing charges, and unit rates for electricity means the energy price cap will actually rise slightly for a typical dual-fuel home. Our prices are changing, but we're not passing on the full overall increase : a typical home will pay the same as they would at October's rates.»
The falling gas rates will save typical homes around £15 between January and March, timing that Jackson described as beneficial given Britain's higher winter gas consumption.
April savings from government policy
From April 1st, 2026, customers will see larger reductions when both Octopus and British Gas implement savings from the Autumn Budget. Chancellor Rachel Reeves vowed to address spiralling energy bills "at the source" with these measures.
Industry analysts predict average savings of £134 per family, with Ofgem suggesting the policy changes will equate to a £134 reduction off the price cap. The breakdown includes £88 from Renewables Obligation policy changes, £59 from Energy Company Obligation adjustments, and £7 in combined VAT savings.
Jackson said: «Octopus has long called for cuts in policy costs to help bring bills down, so we are delighted to see the government taking action. These changes will bring a welcome relief to customers, and we'll pass them through on all of our tariffs as soon as they kick in, so no one misses out.»
A spokesperson for British Gas confirmed: «We welcome the Government's steps to ease energy costs as we've called for these levies to be moved into general taxation for some time. We'll of course ensure all our customers benefit, including those on fixed-term tariffs.»
The Energy Company Obligation Scheme will end in March 2026 as part of these changes.
Warm Home Discount reopens
The Warm Home Discount scheme has reopened, providing a £150 discount off electricity bills to millions of UK households this winter. The payment is applied directly to electricity bills by suppliers rather than as cash.
Twenty-eight energy suppliers are participating in the scheme, including Octopus, British Gas, E.ON Next, EDF, OVO, ScottishPower, and Shell Energy Retail. Eligibility requires claiming specific benefits on the qualifying date of August 24.
The discount is available automatically to households in England or Wales receiving eligible benefits, and to those in Scotland receiving the Guarantee Credit element of Pension Credit. Others must apply manually through their energy supplier.
Solar expansion strategy
Octopus Energy is expanding its presence in the domestic solar market, positioning itself as a major UK installer. The company, which launched in 2015 and became the UK's biggest electricity supplier by 2024, entered solar offerings in 2022.
The supplier charges £1,500 per installed kilowatt on a standard 12-panel house, or £1,658 with a battery pack. Octopus estimates customers can achieve breakeven in nine years, potentially saving over £14,000 after 25 years.
The company's blog states «a typical household could save between £400 and £600 per year» with solar panels alone. Combined with a battery and export tariff, customers could earn up to £300 annually from surplus energy.
Octopus offers up to 15 pence per unit for excess solar power on a flat tariff, or potentially 25 pence per unit depending on the fitter. The company claims a combined solar panel and battery system on its "Fixed Outgoing" tariff can reduce a medium-use home's electricity bill by approximately 90%.
Installation is available in England and Wales, with typical timeframes of two to three months from inquiry to completion. Residential solar installations benefit from a 0% VAT rate until April 2027.
Note: This article was created with Artificial Intelligence (AI).
