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Compare Electricity Prices
Switching your electricity supplier can save you a serious amount of money over the year, and with nearly three in five households never having switched their electricity supplier, UK consumers are helping to boost the profits of the electricity suppliers.
Before you compare electricity prices, you need to know exactly how much you are paying on your electricity each year.
You can estimate this, but it is far better to check your bills and see how many kilowatt hours you are consuming each quarter, and go back over the year to find out a final figure. That way, you will know when you are getting a cheaper deal.
Why are electricity prices rising?
Electricity prices are rising, so the providers tell us, because it is becoming ever more expensive to buy the electricity they deliver to our homes.
The use of fossil fuels such as coal, oil and gas to produce electricity is one of the problems. As resources dwindle, it becomes more expensive to recover what is left, which is why there is such a push towards green energy from wind and solar power.
However, there is an investigation into pricing going on because there is concern from the energy regulator Ofgem that the companies are simply increasing their profit margins. Between June and October 2011, the profit made per customer leapt from just £15 to £125 - a 700 per cent rise - suggesting that it is not all about the cost of energy, but more about pleasing shareholders.
Electricity suppliers and their tariffs
There are a number of electricity suppliers, and each of them will have a variety of tariffs to tempt you to sign up to their deal.
Fixed and capped tariffs will ensure you do not pay more than a set amount for your electricity over a set period, and with the capped rate you will benefit from any falls in electricity prices. Most of us are on the standard tariff with our electricity supplier unless we have switched.
You will not automatically be put onto the cheapest deal with your electricity supplier, but when you compare electricity prices you may see that your existing supplier has a better deal available to you. It is still worth switching to the cheapest deal, even if it is still with your existing supplier.
Other types of electricity
If you have an ethical stance on electricity production, you will also find tariffs where the electricity is generated from renewable sources, like wind turbines and solar power.
However, there are even more traditional types of electricity tariff that some households may find useful:
This is a tariff which offers cheaper electricity to those who are using electricity to heat their homes with storage heaters. The tariff provides cheaper energy for seven hours overnight when general usage is low, but you pay more for using electricity during the day.
Your electricity meter for Economy 7 will separate your day and night electricity usage so you are charged separately - but on the same bill - for both. If your bill is split into day and night usage, you will have Economy 7.
If you do not use a lot of electricity overnight, this is likely to be an expensive tariff for you.
You will not be surprised to learn that on this tariff you get 10 hours of cheaper electricity, although three hours are cheaper in the afternoon.
When the tariffs start and stop will depend on your electricity supplier.
If you have a south-facing aspect to your roof, you may be able to get solar panels fitted which will mean you can generate your own electricity from the sun.
Many people are taking advantage of deals offered by solar power companies who will provide free or heavily subsidised fitting of solar panels to your roof in return for the 'feed-in' tariff.
Basically, once you have used the electricity you need, any additional electricity is put into the national grid, and you are paid a fee by the UK Government for the amount you put back in.
The amount of feed-in tariff paid will be changed depending on whether your solar panels were installed before or after December 12, 2011, from 43.3p/kWh for those installed before, to 21p/kWh for those installed after.
You can get your very own wind turbine which will provide you with electricity and will also give you a feed-in tariff payment for the electricity you put back into the national grid.
As an example, a 6kWh wind turbine can generate around 10,000kWh a year, giving income and savings of around £3,200 a year, according to the Energy Saving Trust.
For both wind and solar power, not to mention hydroelectric power (which of course would need a water source) you may be able to get grants and assistance to install the relevant equipment.
Green energy suppliers
If you would like to get your electricity from renewable sources, but do not want the expense and hassle of getting your own generating equipment, there are a number of companies that now offer green energy.
A Certified Green Energy Supply will be generated from renewable sources, and can also be less expensive than other electricity suppliers. So it is worth considering.
How to save money on my electricity bills
As well as switching your electricity supplier, you can cut your bills by doing some simple things, like:
- Switching lights off when you have left a room
- Not leaving your laptops and mobile phones on charge when it is not necessary
- Do not boil more water in a kettle than you need to
- Get an energy meter so you can see how much each of your electrical items is using
- Never leave TVs on standby
What factors should I consider when switching my electricity supplier?
Finding the cheapest deal is the main aim of switching your electricity supplier, but that is not the end of the task, as there are a number of other things you will need to consider when you are looking to switch.
You also need to think about:
How you pay
You can get a better deal if you pay by direct debit, and it is one of the easiest ways to budget too. You can use a quarterly direct debit rather than monthly if you prefer, or by cheque or pre-payment meter. But the monthly direct debit will give you the biggest discount on your bill.
Check the detail of the contract before you sign up, to make sure you are not going to get any nasty surprises. Your contract will vary depending on whether you are on a fixed, capped or any other type of tariff, so make sure you know what you are in for.
For example, on a fixed tariff you know what you are going to be paying for your electricity for a set period. But if you want to leave the deal early, you are going to end up paying a penalty in the form of a cancellation fee. This could mean the savings you would see from a new deal are actually wiped out.
In some cases, even where your deal period has come to an end, you may still be contracted to stay with your supplier for a period of time. If you leave early, then again you could pay a penalty.
Fixed or variable rate tariffs
To be sure you will not suffer rises in your energy prices, go for a fixed tariff. This guarantees that the amount you pay will not change for an agreed period of time. The downside is that you will not benefit if prices fall.
If you expect energy prices to drop, go for a variable rate tariff - or even a capped rate - which will give you a benefit if your provider does cut the cost of electricity. Of course, on a variable rate, if the rates go up, you will face higher bills. The capped rate means you know the maximum you will pay on your electricity for an agreed period.
Getting extra benefits from electricity suppliers is a good idea if you can also get a cheaper deal. For example, you can get Tesco Clubcard or Nectar points from some companies, and you could potentially get free Home Cover, which means you can get your boiler or heating fixed more quickly when it goes wrong. Mid-winter, this is a god-send.
Good customer service is more important than you might think, and that is why some people are prepared to pay a bit more to get better service. When you have no problems with your service, it is not an issue, but when something goes wrong and you need some help, good customer service is key.
Friends, family and forums are good places to go to find out which electricity suppliers are considered the best for customer service.
If you are happy to run your electricity services on line, then you should be able to get a better rate. You will have less access to a call centre, you will not get paper bills - instead they will be available online - and you will need to read your meter regularly so that you bills are more accurate.
All of these measures reduce the overheads of the company, so they pass on the savings to you in the form of a cheaper deal.
You should not find it difficult to transfer from one provider to another, and more people than ever are making the switch to save money. MoneySupermarket saw a whopping 1,264% rise in tariff swaps in a single day in June 2011.
Once you have applied online for the cheapest and best deal from the electricity supplier you want to go to, you will wait between four and six weeks for the switch to complete. You do not have to worry about speaking to your existing supplier either, there is no need to.
The only change you will see is a new name on your electricity bill for your provider, and of course lower bills. You will not have any interruption in your electricity supply.