From 1 October, gas bills rise while electricity bills hold steady, so electricity is cheaper compared with gas, but only for now.
From today, two changes apply to household energy bills in Great Britain. Ofgem’s new energy price cap applies to October, November and December, and HMRC’s temporary zero rate of VAT on domestic electricity starts too. For businesses selling and installing heat pumps, the result is a better running-cost comparison this winter, with a clear end date.
What changed on 1 October
Ofgem says the cap for a typical dual fuel household on direct debit rises by 4%. It says higher wholesale gas prices, driven by conflict in the Middle East, are the main cause. Gas bills rise by 8%, while electricity bills stay broadly stable because the government has removed VAT on electricity. Ofgem also says households without gas will see an increase of less than 1%.
HMRC’s brief confirms that domestic electricity moves from the 5% reduced rate to zero from 1 October 2026 to 31 March 2027. Other fuels, including gas, are not affected. Northern Ireland is excluded and stays at 5%.
Ofgem’s published unit rates for direct debit customers put electricity at 26.32p per kWh and gas at 7.97p per kWh for this quarter. That makes a unit of electricity about 3.3 times the price of a unit of gas. Last quarter it was about 3.6 times.
Why it matters for how the business runs
Running costs are often the first objection a customer raises, and a narrower price gap makes that conversation easier. The risk is in how the business handles a change that is good but temporary.
Prices quoted in sales scripts, website calculators and proposal templates go out of date every quarter. If customers are shown this winter’s prices as if they will last, they may feel misled next spring, which leads to complaints and pressure on reviews. If the change does lift enquiries, the strain usually shows up first in survey lead times and in the gap between taking a deposit and getting paid. The quote-to-cash flow process and protecting cash flow and working capital are both worth reviewing before the busiest months.
For businesses working across the UK, Northern Ireland needs separate messaging, because the VAT change does not apply there.
What to check in your own business
- Who owns the price figures? Is one named person responsible for updating unit rates in quotes, calculators and scripts each quarter?
- What does the team say about April? Can sales staff explain clearly that the VAT relief ends on 31 March 2027, without overpromising?
- Where would extra demand cause problems? If winter enquiries rise, which part of the process becomes the bottleneck first: surveys, design, installation slots or invoicing? How to grow an HVAC business covers the operational side of handling that growth.