The energy price cap is risen again: how can solar panels help protect your household?

Solar panels installed on homes in Swansea

The energy price cap is rising again. From 1 October 2026, the headline annual figure for a typical household paying by Direct Debit will increase by 4%, from £1,663 to £1,723.

That is an increase of £60 a year, or around £5 a month, if the new rates remained in place for 12 months. For many households, it is another reminder that energy bills can change for reasons completely outside their control.

Solar panels cannot stop the price cap from rising. What they can do is reduce the amount of electricity you need to buy from the grid—and therefore reduce how exposed your household is to future electricity price increases.

What does the new energy price cap mean?

The figure of £1,723 is not the maximum that a household can pay. The price cap limits the unit rates and standing charges that suppliers can apply to standard variable tariffs. Your actual bill still depends on how much energy you use.

From 1 October 2026, the average Direct Debit rates across England, Scotland and Wales will be:

Energy	Average unit rate	Average standing charge
Electricity	26.32p per kWh	54.83p per day
Gas	7.97p per kWh	29.68p per day

These are national averages. The precise rates vary by region, payment method and meter type.

VAT on domestic electricity is also being reduced from 5% to 0% between 1 October 2026 and 31 March 2027. The Government estimates that this will save the average household about £45 a year. However, higher wholesale energy costs mean the overall cap is still increasing.

Ofgem says most of the latest increase is due to rising gas costs. Average gas bills are expected to increase by around 8%, while households that do not use gas should see a much smaller increase of less than 1%.

Why does gas still affect the price of electricity?

One of the central points highlighted in The Guardian’s recent analysis of UK energy bills is that Britain remains heavily exposed to the price of gas.

Britain now generates a substantial proportion of its electricity from wind and solar. However, gas-fired power stations are still regularly needed to meet demand and balance the electricity system—particularly when renewable generation is low.

Under the current wholesale market, the most expensive generation needed to meet demand can have a strong influence on the wider electricity price. Because this is frequently gas-fired generation, increases in international gas prices can feed through into electricity costs too.

That helps explain why more renewable electricity on the national grid does not always produce an immediate or equivalent reduction in household electricity prices.

Long-term reforms to the electricity market are being discussed, but households cannot control how quickly those reforms happen. Solar panels offer a more immediate way to reduce the amount of electricity purchased at retail rates.

How do solar panels reduce energy bills?

Solar photovoltaic panels generate electricity from daylight. When your home is using electricity at the same time as the panels are generating, that solar electricity can supply the property directly.

Every unit of solar electricity used in the home is a unit that does not need to be purchased from your supplier.

For example, if your electricity import rate is 26.32p per kWh, using 1,000 kWh of solar electricity directly in the property instead of buying it from the grid would avoid approximately £263 of electricity purchases at that rate.

This is a simplified illustration rather than a savings forecast. Actual savings depend on:

• the size and orientation of the solar array;

• shading from trees, buildings or roof features;

• how much electricity the system generates;

• when the household uses electricity;

• the import tariff and unit rate;

• whether battery storage is installed; and

• the amount paid for exported electricity.

  
  

A professional solar proposal should calculate likely generation and savings for the individual property rather than relying on a generic national average.

Solar reduces exposure to future price rises

Without solar panels, nearly every unit of electricity used in a home must be purchased from an energy supplier. If the retail unit rate rises, the cost of that electricity rises too.

With solar panels, part of the household’s electricity demand is supplied by the roof. The household may still purchase electricity at night, during poor weather and when demand exceeds solar generation, but it is buying fewer units from the grid overall.

Solar therefore does more than provide an estimated annual saving. It gives households a degree of protection against future electricity-price volatility.

It is important to be realistic: solar panels do not normally eliminate an electricity bill. Standing charges remain payable, winter generation is much lower than summer generation and most homes will continue to import electricity. The benefit is reduced reliance on purchased electricity, not complete independence from the grid.

What happens to solar electricity you do not use?

When solar panels generate more electricity than the property needs, the surplus is normally exported to the grid. An eligible household can receive payment for this electricity through a Smart Export Guarantee tariff.

Export rates vary considerably between suppliers and tariffs. Some require the customer to import electricity from the same supplier, while others are available independently. It is worth comparing the full tariff conditions rather than looking only at the advertised export rate.

In most cases, using solar electricity within the home is financially more valuable than exporting it. If you avoid buying electricity at 26.32p per kWh, that unit has saved 26.32p. If it would otherwise have been exported for a lower amount, using it yourself delivers the greater value.

That is why the timing of household demand matters.

How can you use more of your own solar electricity?

Households can increase their use of solar generation by moving flexible demand into daylight hours. Depending on the property, this could include:

• running the washing machine or dishwasher during the day;

• heating water when there is surplus solar generation;

• charging an electric vehicle during solar-producing hours;

• scheduling suitable appliances through smart controls; or

• storing surplus energy in a home battery for use later.

The objective is not to waste electricity simply because it is being generated. It is to move energy use that would have happened anyway into periods when the solar system can supply it.

How does battery storage help?

Solar generation is usually strongest around the middle of the day, while many homes consume more electricity in the morning and evening. Battery storage can bridge that gap.

Instead of exporting all surplus solar electricity, a battery can store some of it and supply it back to the house later. This can increase the proportion of solar generation used within the property and further reduce electricity imports.

A battery may also be able to charge from the grid during cheaper off-peak periods. The stored energy can then be used when import rates are higher. This can be particularly useful during winter, when solar generation is lower.

Battery storage does not automatically provide a good return in every home. The result depends on:

• the battery’s usable capacity;

• its charge and discharge power;

• household electricity consumption;

• the existing or proposed solar system;

• the difference between peak and off-peak tariff rates;

• expected battery losses; and

• the installed cost and warranty.

  
  

Correct sizing is important. A battery that is too large may add considerable cost without being fully used. A battery that is too small may regularly run out before the high-cost period ends.

Can solar panels protect you from power cuts?

Not automatically. A standard grid-connected solar system must switch off during a power cut to protect engineers working on the network.

Backup power requires compatible equipment and a correctly designed emergency power supply, or EPS, arrangement. Depending on the system, this might support selected essential circuits or most of the property.

Backup capability should be discussed during the design stage. Adding it later may require further equipment, electrical alterations and additional cost.

Are solar panels still worthwhile in South Wales?

Yes—provided the property and system are suitable. Solar panels generate from daylight, not heat, so they continue to produce electricity in Wales throughout the year. Generation is naturally higher during longer, brighter summer days and lower during winter.

The financial performance depends on much more than the local weather. Roof orientation, pitch, shading, system size, installation cost, household demand and tariff choice can all make a significant difference.

This is why we model each Ulex Energy system around the individual home. We assess:

• roof space, orientation and shading;

• expected annual solar generation;

• the customer’s present electricity use;

• likely future demand, such as an electric vehicle or heat pump;

• solar self-consumption and export;

• appropriate battery capacity, where required; and

• projected annual savings and payback.

  
  

The aim is not simply to install as many panels or as much battery capacity as possible. It is to design a system that makes practical and financial sense for the household.

Is now a good time to consider solar?

The latest price-cap rise shows that household energy costs remain vulnerable to international fuel prices and changes in the wider energy market.

No installer can guarantee future energy prices, and solar should never be sold on that basis. However, reducing the number of electricity units purchased from the grid can reduce a household’s exposure to whatever those future prices may be.

For a suitable home, solar panels can:

• reduce electricity imports;

• turn unused roof space into a source of electricity;

• provide payment for surplus generation;

• work with battery storage and flexible tariffs;

• support future electric-vehicle or heat-pump demand; and

• provide greater control over long-term household energy costs.

  
  

The key is to start with a proper assessment and realistic calculations.

Thinking about solar panels or battery storage?

Ulex Energy designs and installs solar PV and battery storage systems across Swansea and South Wales. Every proposal is based on the individual property, its expected generation and the household’s energy use.

We calculate the expected savings and payback before you commit, so you can make an informed decision based on clear figures rather than generic promises.

Contact Ulex Energy to discuss whether solar panels or battery storage could help reduce your reliance on increasingly expensive grid electricity.

Sources

This article was prompted by and acknowledges The Guardian’s reporting on the latest energy-price rise and possible reforms to Britain’s energy market.

The price-cap figures and explanation are supported by:

• Ofgem: Energy price cap will rise by 4% from October 2026

• Ofgem: Energy price cap rates from 1 October to 31 December 2026

• UK Government: Removal of VAT from household electricity bills

• National Energy System Operator: Electricity markets explained

  
  

Information was correct at the time of writing on 27 August 2026. Energy prices, tariffs and government policy can change. Any estimated solar or battery savings should be calculated for the individual property and its energy use.