January 2027 Price Cap Forecast: 16% Rise and Solar

Cornwall Insight's latest forecast puts the January 2027 price cap at £1,999 a year for a typical dual-fuel Direct Debit household — about £276, or 16%, above October's £1,723. It's a forecast, not a decision: Ofgem announces the real January–March figure on 25 November 2026. But if it lands anywhere near this, the electricity unit rate your solar panels displace gets noticeably more valuable over winter.

What the forecast says

Cornwall Insight's prediction for 1 January to 31 March 2027 is £1,999.28 for a typical dual-fuel Direct Debit customer, calculated from wholesale prices at close of play on 28 September 2026. The breakdown is an electricity unit rate of 30.28p/kWh with a 55p daily standing charge, and gas at 9.76p/kWh with a 31p daily standing charge. For comparison, Ofgem's confirmed October-to-December cap is 26.32p/kWh for electricity and 7.97p/kWh for gas — so on the headline figures, electricity is up roughly 15% and gas roughly 22%. Our October price cap breakdown has the current figures in full.

Two caveats matter. First, forecasters revise as wholesale markets move; the same forecaster's earlier estimate was lower, and the final number could move either way before 25 November. Second, the forecast assumes electricity stays VAT-free until 31 March 2027, matching the government's temporary cut from 5% to 0% — our guide to VAT on electricity bills explains how that works and when it ends.

What a higher unit rate means for solar

Every kilowatt-hour of solar you use yourself is worth the unit rate you'd otherwise pay. At the forecast 30.28p, 1,000 kWh of self-consumed solar would be worth about £303, against about £263 at 26.32p — roughly £40 more per 1,000 kWh. That's illustrative arithmetic on the headline rates, not a prediction of your bill, and your own tariff may differ from the cap.

Winter is the catch. January to March is the weakest solar quarter in the UK, so there are far fewer self-generated kilowatt-hours to value at the higher rate. The bigger effect is on payback: a higher electricity price, if sustained, shortens the time a system takes to earn back its cost. Our solar panel cost guide covers current installed prices to run your own numbers.

Where a battery fits

Export payments don't follow the cap. Smart Export Guarantee rates are set by each supplier, and typical fixed rates sit well below the import price. When the gap between what you pay to import and what you're paid to export widens, using your own power becomes the better deal. A home battery stores midday surplus for the evening peak; see our guide to maximising solar self-consumption for batteries, diverters and appliance timing.

What to do before 25 November

The price cap only governs default tariffs. If you're on a fixed deal, it doesn't set your rate, though forecasts often influence what suppliers offer when fixes are repriced. If you're on a standard variable tariff and have solar, compare time-of-use and solar-friendly deals — our best Octopus tariffs for solar owners roundup is a starting point — and check how the cap works in our price cap explainer. Wait for Ofgem's confirmed figure before changing anything based on a forecast.