On 1 April 2026 the Ofgem energy price cap dropped. The average UK electricity unit rate fell from 27.69p/kWh to 24.67p/kWh — a 6.7% reduction. For most households this lands as a small line on the next bill. For UK home bakers running an oven five or six times a week, it’s a small-but-real margin shift in your favour — but only if you recalculate.
Most home bakers won’t. The same pattern shows up across the home-baking businesses we talk to: ingredient costs get tracked carefully, packaging gets noted, and the oven gets ignored. It’s the cost everyone forgets — partly because it’s hidden inside a quarterly bill that lumps in the kettle, the heating, and Netflix on the telly.
Worth fixing.
The numbers, in plain English ¶
A typical 2 kW domestic oven running at temperature for 2 hours uses around 4 kWh of electricity. Run the maths against the old rate and the new:
- Old rate: 27.69p/kWh × 4 kWh = £1.11 per bake
- New rate: 24.67p/kWh × 4 kWh = £0.99 per bake
- Saving: 12p per bake
Not life-changing on a single brownie tray. But over 50 bakes in a year — about one a week — that’s a £6 margin shift. Across 100 bakes, £12. Across the kind of volume a regular market seller does, real money.
The catch: this isn’t an “extra” 12p in your pocket. It’s a 12p change in the cost line that’s supposed to be in your pricing already. If your oven has never been costed properly, you don’t gain anything from the cap drop — you just keep hiding the same overhead, slightly cheaper than before.
Not costing your oven yet? The Food Costing Toolkit has an Overhead Allocator tab that handles electricity, gas, packaging, equipment depreciation, and more across every recipe — so your prices track your real costs, not your guessed ones.
Why most home bakers under-cost their oven ¶
Three reasons it gets missed.
It’s not on a receipt. When butter goes up 19%, you see the new price at Tesco. The oven cost arrives as a quarterly direct debit that mixes baking electricity with everything else in the house. There’s no moment of friction that prompts a recost.
The maths feels finicky. Working out kWh × time × rate × bakes-per-recipe per item feels like effort for what looks like pennies. So it gets skipped.
Ovens vary. A modern fan oven at 180°C is doing different work to an older non-fan one. Wattage labels are often nominal rather than actual. Without a smart plug measuring real-world draw, most bakers just guess — and most guesses round down.
The result: the oven sits as an invisible cost line, the same as packaging and wastage, quietly eating margin that should be visible.
What this means for your pricing ¶
Your selling price is supposed to cover everything that goes into making a product, plus margin. Ingredients and your time are the obvious half — the free Recipe Costing Calculator handles those in three minutes. The other half is overheads: a share of your kitchen costs, your equipment, insurance, energy, wastage, packaging, and any platform or card fees. Then margin on top of all of it.
If your oven has never been costed properly and the cap just changed, you’ve now got a small problem and a small opportunity. The problem: your costs were already wrong, just by a slightly different amount than you thought. The opportunity: a clear moment to do the recost and start tracking it properly going forward.
The cap resets again on 1 July 2026, and again every three months after that. Each reset is a small adjustment — but they compound across a year of bakes. A baker who recosts every quarter stays accurate; one who doesn’t watches their margin drift slowly out of shape.
Build the quarterly habit ¶
Four times a year — 1 January, 1 April, 1 July, 1 October — Ofgem publishes the new cap. Block out 15 minutes the week of each reset. Update the rate in your costing system. Recheck the worked example for one or two recipes that use the oven heavily. Adjust prices if anything looks meaningfully off.
That’s it. The actual maths takes minutes once you’ve done it once.
Energy is one piece of a bigger picture. The cap drop is a useful prompt — but the real lever is having a costing system that catches every cost shift, not just the one that made the news this quarter. Butter is up 19% this year. Packaging went up 4% last quarter. Card-reader fees changed when SumUp updated their rate card. Each one matters about as much as the energy cap. Together, they’re the difference between a margin that holds and a margin that quietly disappears.
The 1 July reset is already in the calendar. Get ahead of it now and the next four quarters are easy.
Common questions
When did the April 2026 Ofgem cap change take effect?
How much does my oven actually cost to run per bake?
Cost every overhead properly.
Energy is one of many costs that eat margin. The Food Costing Toolkit tracks your electricity, gas, packaging, and equipment costs across every recipe — so your prices stay honest when the cap shifts, when butter rises, or when anything else moves.
Get Price It Right — £79One-time purchase · no subscription · PDF guide included