Renewables Obligation: buy-out price and mutualisation threshold and ceilings 2026 to 2027
Summary
Ofgem sets the RO buy-out price at £69.34/ROC for 2026-27, up 3.4% from £67.06, with the indexation basis switching from RPI to CPI following DESNZ's January 2026 decision. The obligation level drops slightly to 0.472 ROCs/MWh from 0.493. Mutualisation ceilings are £417.7m for England & Wales and £41.8m for Scotland.
Why it matters
Routine annual update to a legacy scheme closed to new entrants since 2017. The RPI-to-CPI switch marginally slows the escalation of supplier costs — CPI typically runs 0.5-1pp below RPI — but this is parameter adjustment within an administered framework that will run until the last ROCs expire in the early 2040s.
Key facts
- •Buy-out price: £69.34/ROC for 2026-27 (up from £67.06, +3.4%)
- •Indexation switched from RPI to CPI effective 1 April 2026, per DESNZ decision of 28 January 2026
- •CPI change applied: 3.4% for 2025 calendar year
- •Obligation level: 0.472 ROCs/MWh (down from 0.493)
- •Mutualisation ceiling: £417.7m (E&W), £41.8m (Scotland)
- •Mutualisation threshold: £83.3m (E&W), £8.3m (Scotland)
- •Buy-out price has risen from £36.99 in 2010-11 to £69.34 — an 87% increase over 16 years
Timeline
Areas affected
Memo
Renewables Obligation: buy-out price and mutualisation threshold and ceilings 2026 to 2027 | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Renewables Obligation: buy-out price and mutualisation threshold and ceilings 2026 to 2027 Publication type: Data Publication date: 31 March 2026 Scheme name: RO Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn The Renewables Obligation (RO) scheme encourages energy companies to use renewable energy sources. Electricity suppliers must present a specified number of Renewables Obligation Certificates (ROCs) per megawatt hour (MWh) of electricity supplied during each obligation period. Buy-out price and mutualisation threshold and ceilings 2026 to 2027 The buy-out price is the amount suppliers must pay for each ROC they do not present. Mutualisation is triggered when there’s a shortfall in the buy-out fund. Ofgem divides the shortfall amongst the remaining suppliers to cover the cost. Buy-out price for 2026 to 2027 £69.34 per Renewables Obligation Certificate Mutualisation threshold for 2026 to 2027 England and Wales: £83,300,000 Scotland: £8,300,000 Mutualisation ceiling for 2026 to 2027 England and Wales: £417,747,225.53 Scotland: £41,774,722.53 Mutualisation does not apply in Northern Ireland. Definition and shortfall amount You can find the definition and shortfall amount per obligation period for England and Wales in Article 72 (3) in the Renewables Obligation Order 2015 as amended by the Renewables Obligation (Amendment) Order 2021 . You can find the definition and shortfall amount per obligation period for Scotland in Article 48 (3) and Schedule 3 in The Renewables Obligation (Scotland) Order 2009 as amended by The Renewables Obligation (Scotland) Amendment Order 2023 . Annual updates We previously updated the buy-out price and mutualisation ceilings annually to reflect the average monthly percentage change in the Retail Prices Index (RPI) during the preceding calendar year. However, following DESNZ’s decision as announced on 28 January 2026 this will now be based on the monthly change in the Consumer Price Index (CPI) during the preceding calendar year, with the change taking effect from 1 April 2026. Applying this change to the inflation figures based on a CPI change of 3.4% (Source: Office for National Statistics ) for 2025 calendar year the buyout price for 2026/27 RO year 1 from Apr 2026 to 31 Mar 2027 would be £69.34. On 11 February 2026, Ofgem reported on the above proposed changes to the buy-out price and mutualisation thresholds for 2026 . We update the mutualisation thresholds annually based on the value of the scheme. Buy-out prices and obligation levels for 2010 to 2027 Obligation period (1 April to 31 March) Buy-out price England, Wales and Scotland obligation levels (ROCs/MWh) Northern Ireland obligation levels (ROCs/MWh) 2010 to 2011 £36.99 0.111 0.0427 2011 to 2012 £38.69 0.124 0.055 2012 to 2013 £40.71 0.158 0.081 2013 to 2014 £42.02 0.206 0.097 2014 to 2015 £43.30 0.244 0.107 2015 to 2016 £44.33 0.290 0.119 2016 to 2017 £44.77 0.348 0.142 2017 to 2018 £45.58 0.409 0.167 2018 to 2019 £47.22 0.468 0.185 2019 to 2020 £48.78 0.484 0.190 2020 to 2021 £50.05 0.471 0.185 2021 to 2022 £50.80 0.492 0.194 2022 to 2023 £52.88 0.491 0.193 2023 to 2024 £59.01 0.469 0.184 2024 to 2025 £64.73 0.491 0.192 2025 to 2026 £67.06 0.493 0.193 2026 to 2027 £69.34 0.472 0.184 Print this page Share the page Share on Facebook Share on Twitter Share on LinkedIn Close