Cap offers: what are they and how do they work?
Cap offers: what are they and how do they work?
Cap offers are a tariff option in the free market, which allow the customer to benefit from a variable price for the energy component, but with a predefined ceiling in the contract signed by the customer (Price Cap). This means that, if the cost of energy goes down, you pay less on the power tariff, but if the PUN Index GME exceeds the contractually established ceiling, the price of the energy component on your bill remains locked at the threshold determined by the supplier as the maximum value.
This solution offers protection against sudden market price increases, while at the same time maintaining the possibility to make savings during periods when energy prices fall. To better understand this mechanism and find the most advantageous power offers for you, this article takes a look at the key aspects you need to know.
3 points for understanding cap offers
Cap offers are only available on the energy free market, where energy suppliers offer customised tariffs based on competition. To better understand how cap offers work, there are three key points to consider:
The difference between the fixed and variable rate: to start with, a comparison with the fixed or variable interest rate applied to a home loan may be of some help. With a fixed-rate mortgage, every instalment you pay remains the same, because the interest rate is locked at the market rate when the contract is signed. With the variable rate, on the other hand, the instalment changes according to market trends: you can pay more one month, but save the next.
Ceiling: the supplier sets a limit value above which the price of the energy component cannot rise (price cap), thus ensuring stability within fluctuating market prices.
PUN Index GME: this is the wholesale energy price in Italy, as set daily on the Power Exchange. Cap offers are based precisely on this value: if the PUN Index GME remains below the cap, the price of the energy component paid by the user follows the market trend; if the PUN Index GME exceeds the cap, the user will continue to pay the maximum value as set in the contract.
Why choose a cap offer
Those seeking stable energy costs without losing the advantages of a dynamic market may find cap offers to be the ideal solution. Find out more about the advantages of choosing the best power offers for your consumption habits.
Protection from price increases: one of the main advantages of a cap offer is security: regardless of market fluctuations, the price of energy can never exceed the contractually agreed cap. This is a great advantage in periods of high instability such as those characterised by energy crises or seasonal peaks in demand.
Benefits from reductions: unlike a fixed-price tariff, cap offers allow you to take advantage of reductions in energy costs. If the PUN Index GME falls below the ceiling, the customer will pay a lower price, aligned to the market value. This feature makes cap offers more dynamic than locked tariffs.
Greater predictability: compared to a fully indexed offer, which can vary without limits according to the PUN Index GME, offers with caps can provide better cost control. Even if this is not a fixed price, the certainty of a ceiling helps to plan the family or business budget without the risk of unpredictable bills.
How to activate a cap offer
Have you decided that a cap offer might be the right choice for you? Here's how to activate it without surprises:
Explore the available offers: check the power offers available on the free market and make sure the conditions are favourable for your consumption.
Read the contract carefully: make sure you understand how the contractual cap is applied.
Keep an eye on PUN Index GME developments: monitor the market to assess whether an offer with a cap is cheaper for you than other solutions.
Proceed with activation: once you have chosen the right offer, you can complete your membership by signing the relevant contract with your provider.
Enel Energia is always by your side to find profitable solutions for your daily energy needs. Look at all the details and solutions to optimise your expenses and reduce your bill costs on enel.it.
Verify ZIP Code
Enter the ZIP code of the residence for which you want to activate the offer and check if you're eligible. If the result is positive, you can proceed with the subscription.
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