What happens if electricity gets really cheap?

Even at 15p/kWh (historically low): a 4kW system still saves £360-£680/yr. Payback extends to 11-18 years but remains profitable. At any realistic UK electricity price, solar pays for itself.

Can electricity prices go down from here?

Unlikely to return to pre-2021 levels (18p). Reasons: gas price volatility, grid investment costs, net zero policies, and increasing global energy demand. Most analysts predict 25-35p/kWh for the foreseeable future.

Is solar a hedge against price rises?

Yes — solar locks in free electricity at today's cost for 25-30 years. If prices rise 5% per year: your solar savings double in 14 years. Solar is the best inflation hedge available to homeowners.

Does the cap affect SEG export rates?

Indirectly — higher wholesale prices tend to increase SEG rates. During the 2022 crisis, some SEG rates reached 15-20p/kWh. Current rates: 4-15p/kWh. Higher cap generally means higher export income.

Solar and Energy Price Cap

By Home Solar Guide Team|Updated 18 March 2026|money

Independently written | Evidence-based | Sources cited

Solar price cap — Higher price cap = higher solar savings. Solar is your hedge against rising prices.

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How does the price cap affect solar savings?

The Ofgem energy price cap directly determines your solar savings: every kWh you self-consume saves you the unit rate. CURRENT CAP (24.5p/kWh): 4kW system saves £580-£1,100/yr. IF CAP RISES TO 30p: saves £720-£1,360/yr. IF CAP RISES TO 35p: saves £840-£1,590/yr. IF CAP FALLS TO 20p: saves £480-£900/yr (still excellent). HISTORY: Pre-crisis (2021): 18p/kWh. Peak crisis (Oct 2022): 34p/kWh. Current (2026): 24.5p/kWh. The trend is UP — energy prices have never returned to pre-crisis levels. Solar locks in FREE electricity regardless of what happens to the cap. Even at the lowest realistic future price (20p/kWh): solar ROI remains 80-300%. At current or higher prices: solar is one of the best financial decisions available to UK homeowners.

Frequently Asked Questions

Related: Home Heating Systems

Solar panels are most powerful when combined with an efficient heating system. Heat pumps use solar-generated electricity to heat your home at 300-400% efficiency — making them the ideal partner for solar.

heat pump running costs in the UK

Heat pumps use electricity at 300-400% efficiency, making them ideal partners for solar.

From our sister site Home Heat Pump Guide