Understanding your energy usage
Knowing how much gas and electricity you use helps to give you the most accurate quote when comparing energy deals. Our guide explains how to work out your energy usage, and what to do if you don’t have the information to hand.
Key takeaways
Underestimating your energy usage can result in a lower monthly direct debit, but this doesn’t mean you’re getting a better deal as it could lead to a larger bill at the end of the year if your actual usage is higher than estimated
Overestimating your usage can lead to higher monthly payments and a surplus of credit on your account, while a small surplus is normal due to seasonal changes, a large surplus means you’re overpaying
If you can’t determine your exact usage, you can estimate it by answering questions about your home, such as its type, age, number of bedrooms, number of occupants, and usual energy usage patterns
Energy suppliers factor in how much gas and electricity you use when calculating your unique quote, so when you run an energy quote with us, we’ll ask you some questions about your energy usage. As part of this, we’ll ask you to tell us your average gas and electricity usage (in kilowatt hours - kWh) or spend (in £).
Why is working out your exact usage important?
Using either of these figures allows us to get the most accurate quote from a supplier, to see what you would pay if you switched. Not only that, it means that once you switch, your actual bill amount shouldn’t be significantly more or less than you were expecting. This way, you can relax knowing there are no frustrating surprises down the line.
Underestimating your usage
If you underestimate your energy usage, the likely result would be a lower monthly direct debit amount. On the face of it, this might seem like a good thing - but it’s important to note that lowering a direct debit doesn’t mean you are getting a better deal.
Instead, it means that you will be paying less each month towards the cost of your energy. If you underestimate your usage by a significant amount, this could result in a larger than expected bill at the end of the year.
Overestimating your usage
The same principle applies if you overestimate your usage - this can often happen if your recent bill relies on estimates, rather than actual meter readings that you’ve taken.
Overestimating would likely result in the supplier setting your monthly direct debit at a higher level than if you’d worked out your exact energy usage. This would mean that you end up paying more each month towards the cost of your energy, even if your actual usage doesn’t match up.
If you overestimated by a significant amount, this could build up a surplus of credit on your account. A small amount is generally fine, as most of us use less energy in summer and more in winter. However, a large surplus would persist despite these seasonal changes in usage. The upshot of this is that you’d be overpaying each month, leaving you out of pocket.
Most energy companies, including the Big Six, now offer automatic refunds when you’re in credit. However, the threshold for this automatic refund does vary - and in some cases, suppliers still leave it up you to push for a refund. This means you could be left with less cash in your pocket until you’ve been refunded.
Working out your usage
It’s best to work out your exact energy usage using your latest bill if you have it. Rules set by the regulator Ofgem means all suppliers must include details such as your energy consumption on your bill in a clear and engaging way.
Despite this improvement, energy bills can still sometimes be difficult to understand.
If you are having trouble understanding your energy bill, we’re here to help break down the basics for you, as well as explain the terms you’re likely to see. If you’re just looking to work out your energy usage, the two figures you should look for are:
Usage (kWh) – often on the second page of your bill. A kilowatt hour (kWh) is the unit of energy that your supplier uses to measure the amount of energy you’ve consumed. A kilowatt hour is equal to 1,000 watts of power used for one hour. This figure is the most accurate indicator of how much gas and electricity you’ve used over the period you are being billed for
Amount spent (£) – alternatively, you can state your usage in amount spent (£) – remember though, we’re looking for the total spent on electricity and gas separately, excluding VAT. On your bill, this will likely appear as ‘total charges for electricity/gas’
Once you’ve located your usage or amount spent here’s three points to remember:
Watch out for estimates - when checking your bill for the energy you’re using in kWh, it’s important to check that your consumption is listed as either ‘A’ – for ‘actual’, or ‘C’ – for ‘customer’. If your usage is listed as ‘E’ or ‘estimated’, it’s likely that you haven’t supplied a meter reading. Supplying an accurate meter reading and asking for a revised bill is the best way to rectify this. You can do this online, over the phone or by post
Get an average from a couple of bills - it’s useful to check out a couple of bills to work out an accurate average of your usage. Doing this helps account for the fact that you’ll usually end up using more gas and electricity in winter compared to the rest of the year
Only input your ongoing energy spend – if you choose to state how much you spend on energy (in £) rather than how much energy you use (in kWh), make sure to exclude any credit and debt that may apply to you, Green Deal or additional service costs
We also realise that working out your exact usage might not be possible for everyone. You may have only recently moved into a new home, or you just might not have one to hand.
Don’t worry if this applies to you as we can help you work out your estimated usage.
Estimating your energy usage
To help you work out an estimate of your usage, we’ll ask you a few simple questions to help us understand how your home is built, using information about similar properties.
Whether you live in a house or a flat, as well as what type – the type of property you live in makes a big difference to the amount of energy you use, simply because of how it was built
When your home was built – this will help work out how much insulation you’re likely to have, as well as the size of the rooms and the type of heating system
How many bedrooms your home has – the more rooms there are in your home, the more space there is to heat and light. According to Ofgem, yearly gas usage increases by roughly 2,500kWh for every additional bedroom in your home, with electricity use going up by 250kWh
How many adults live there – according to statistics gathered for the government’s National Energy Efficiency Data-Framework (NEED), household gas and electricity consumption increases marginally for each additional adult living there
Your usual level of usage – whether this is generally in the day or at evenings and weekends
Once we have your answers to these questions, we’ll generate an estimate of your usage, and use this to find you a list of competitive deals.
