If you’ve been reading our price cap tracker posts, you might be familiar with a bit of technical lingo used by Ofgem in its calculations: typical domestic consumption values (TDCVs). Really rolls off the tongue, doesn’t it?

While this sounds incredibly dry, it’s actually crucial to understanding the true impact of the apparently modest price cap rises we’ve seen this year, and the heftier rise that’s forecast for January 2027.

What does the headline price cap amount actually mean?

The price cap is most often reported as an annual amount - currently £1,723 for October to December 2026. 

But as many of you will know all too well, this doesn’t mean that no-one pays more than £1,723 for their energy. The actual prices being capped are the unit prices and standing charges. 

Source: Ofgem

These are then used to produce that headline annual amount, by multiplying those figures by the average amount of energy we consume.

And this is where the TDCVs come in.

Why the difference in figures?

The way the price cap is calculated is pretty complex, varying by region and payment method. These figures just aren’t very helpful in understanding energy price trends. So while the headline figure isn’t perfect, it’s more useful to have one figure we can all discuss and compare over time. 

Who decides what is average and how?

So if the price cap is an attempt to show the average energy bill, it must be affected by how much energy we are using. 

Our energy usage is always changing and so Ofgem has to change its assessment of the average household, reflected in changes to the TDCVs.

And changes in TDCVs mean changes to the headline price cap figure. 

So what happens when the TDCVs change?

When TDCVs change, the headline price cap figure gets viewed through a different prism. 

For example, the actual unit and standing charge amounts could stay the same, but if the TDCVs go down (as has been the trend in recent years), the headline price cap goes down too - without prices actually changing. 

This helps explain the change in July this year, when the headline price cap increased around 1% from £1,641 to £1,663. However, the TDCVs also changed at the same time. So if you apply the same consumption figures to the new price cap, the headline amount would actually be £1,862, a 10% rise. 

Figures from energy-uk.org.uk

Are these changes a bit sneaky?

It makes total sense to change TDCVs when data shows that our energy consumption is changing, and this is just what Ofgem is doing. 

The problems arise with communicating the price cap and how it affects our bills. 

If you want an accurate picture of how your energy bills have changed over time, the best place to go is straight to the source: your statements. You’ll be able to see how much energy you’ve used and what you’ve paid for it. Chances are your bills have followed the upward trend we see reflected in the price cap. 

And if you’re considering investing in renewable tech for your home, this is the story to listen to.