The energy price limits how much suppliers can charge per unit of energy. It is based on the costs that Ofgem – Great Britain’s energy regulator – calculates that suppliers need to spend, in order to get energy to your home. It exists to help ensure that energy prices and profits are balanced.
The price cap isn't a limit isn’t on your total bill; it makes sure that suppliers pass on savings if costs to supply energy fall. If costs rise, then you have peace of mind that the price rise you receive can be justified.