Electricity prices rise 13% on 1 July: what heat pump owners need to do now

What's changing on 1 July 2026

Ofgem confirmed on 27 May 2026 that the energy price cap for Q3 2026 (1 July to 30 September) rises by 13% from the Q2 level. The confirmed figures for electricity:

The rise is driven primarily by wholesale gas prices linked to ongoing geopolitical pressures. The electricity rate rises by 1.44p/kWh. Standing charges remain broadly stable.

For a heat pump household using 7,000 kWh of electricity per year, the Q3 rise means approximately £101 more per year on the standard variable rate — roughly £25 per quarter.

What it means depending on your current tariff

You're on a variable heat pump tariff (Cosy Octopus, EDF FreePhase, E.ON Next Pumped, British Gas Heat Power)

Your rates change on 1 July. These tariffs price as a percentage of the regional cap, so all bands — off-peak, standard, and peak — rise proportionally. The structure (which hours are cheap, which are peak) stays identical.

Using Cosy Octopus as an example:

The saving relative to the standard cap stays roughly the same. Your absolute bill rises, but so does everyone else's. You don't need to switch tariff purely because of the cap change.

One exception: if you're on Cosy Octopus's six-month fixed version (March 2026 or later signup), your rates may be locked and won't rise automatically. Check your tariff documentation.

You're on a fixed tariff

Nothing changes on 1 July. Your unit rate is locked until the end of your term. If you fixed before the Q3 announcement, you're now sitting below the cap — exactly what a fixed tariff is designed to deliver. If your fix ends before October, review your options before it lapses onto the standard variable rate.

You're on the standard variable rate

Your rates rise automatically on 1 July. This is the most impactful scenario for a heat pump household. At 26.11p/kWh flat, you're paying the full cap rate on every kWh your heat pump draws — no off-peak discount, no structure.

The Q3 cap rise is a direct prompt to compare dedicated heat pump tariffs. The off-peak discounts on Cosy Octopus, E.ON Next Pumped, or British Gas Heat Power don't disappear when the cap rises — the percentage discount is preserved. The gap between "standard variable" and "active heat pump tariff" stays meaningful regardless of where the cap sits.

Should you fix before 1 July?

If you're on a standard variable tariff: comparing fixes is worthwhile. Octopus 12M Fixed is currently sitting at around £1,780/yr TDCV — below the £1,862 Q3 cap. Q4 2026 is forecast to rise slightly further to around £1,899/yr. A fix that locks in below Q3 levels beats both Q3 and the current Q4 forecast.

If you're on a dedicated heat pump tariff: be cautious about switching to a flat-rate fix. A flat fixed tariff removes the off-peak discount that makes heat pump tariffs valuable. You'd be trading 8–21 hours of cheap electricity per day for a single rate — almost certainly at a higher effective rate for your heat pump consumption. Compare your actual effective blended rate from recent bills against any fixed deal before switching.

The calculation: Take your last 12 months of electricity spend, divide by total kWh. That's your effective rate on your current tariff. If any available fixed deal is lower than that number, it might be worth switching. If it isn't, stay put.

The Q4 outlook

The Q4 2026 cap (October–December) will be announced by 26 August 2026. Cornwall Insight currently forecasts a further modest increase to around £1,899/yr — roughly 2% above Q3, putting the standard electricity rate at approximately 26.5–27p/kWh heading into winter.

That forecast matters because winter is when heat pump consumption peaks — 60–70% of annual electricity use falls in October–March. A higher cap in Q3 and Q4 means your two most expensive electricity quarters align with your highest consumption quarters.

A pre-July checklist

1. Check what tariff you're on. Log into your supplier account or check your bill.
2. If on standard variable, compare dedicated heat pump tariffs on Heat Pump Tariffs — any of the main options will beat 26.11p flat for a heat pump household.
3. If on a variable heat pump tariff, note your new Q3 rates when your supplier notifies you. No action required unless you want to review alternatives.
4. If your fixed term ends before October, compare alternatives now rather than waiting until August.
5. If considering Cosy Octopus, the July timing is good — a six-month commitment from July runs to January, covering the peak winter months when Cosy's off-peak value is highest.

The bottom line

The Q3 rise doesn't change the fundamental tariff equation for heat pump owners. The proportional off-peak discounts on dedicated heat pump tariffs are preserved as the cap moves. What the rise does do is widen the absolute gap between standard variable and optimised heat pump tariff users: at Q3 rates, the difference between 26.1p flat and ~15.5p Cosy off-peak is 10.6p/kWh — larger in absolute terms than it was in Q2.

Check what every heat pump tariff costs you at Q3 rates using your actual half-hourly data on Heat Pump Tariffs.

Further reading

• Fixed vs variable tariffs for heat pump owners
• When is the right time to switch tariff?
• The best heat pump tariffs in the UK for 2026

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