Due to the dwindling supply of easily accessible fossil fuels and possibly the increasing profit margins of energy companies, electricity prices are rising. As electricity is essential to run most household appliances, it has never been so important to make sure that you are getting the best deal. In addition, it is just as important to make sure that you are using your energy conservatively.
Simple steps to reduce your electricity bill
One way to lower your electricity bill is to make simple lifestyle changes that reduce the amount of energy wasted in your home. Such moneysaving changes include:
- Remembering to turn the light off when you leave a room.
- Getting energy saving light bulbs.
- Unplugging your charger once your electronic device has finished charging.
- Turning your TV off at the mains as opposed to just leaving it on standby when you’re finished watching it.
You may also find it helpful to purchase an energy meter. These devices help make you aware of how much electricity you are using and they also let you know how much energy each of your electrical items consumes. These devices can also calculate the cost of using electrical devices per kWh and the CO2 emissions.
If you are particularly environmentally conscious, you may want to look into investing in your own renewable energy supply, such as solar panels on your roof or a wind turbine. While these have long term environmental and economic benefits, initial start-up costs can be quite high.
Types of electricity plan
While the individual prices vary depending on your provider, there are three principal types of tariff:
Firstly there is a variable tariff. As the name suggests, the price you pay for your electricity varies according to the current price of electricity. The main benefit of this tariff is that you are not locked into a plan; this means that it is easy for you to change suppliers if another company is offering a better electricity deal. However, the major drawback is that you are at the mercy of the market: you are not protected by price increases.
On the other hand, a fixed tariff keeps the cost of electricity at a set rate. This means that you are protected from any energy price increases. Although unlikely, a fixed tariff will prevent you from enjoying any savings if energy prices should fall. The main disadvantage of a fixed tariff is that you often locked into a contract for at least a year; you are usually charged a cancellation fee if you wish to end the contract early. In addition, the fixed rate is usually higher than a variable rate.
Capped tariffs are less widely available than fixed and variable tariffs, and are often more expensive. Like a fixed tariff, a capped tariff protects you from increases in energy prices. In addition, your monthly charge falls if energy prices decrease, just like a variable tariff. Furthermore, if you use less energy than what you are paying for, your bill will be reduced. While this is certainly attractive, it must be remembered that these tariffs are generally more expensive than the other types, so you are not necessarily save much money.
Tips for changing electricity supplier
- Think about what payment method you use as sometimes energy providers will offer a special discount if you set up a direct debit. Ask your advisor for more information.
- Think carefully about what tariff would best suit you. Consider your budget, energy consumption and the pros and cons of each type of tariff.
- Shop around for the best deal. Use price comparison websites to quickly compare the deals offered by the major energy providers. Also, take a look at the energy suppliers’ websites as sometimes these sites display extra deals or benefits that are not featured on a price comparison website. In addition, read some customer reviews to get an idea of the quality of the customer service offered by the energy provider.
Comparison of fixed annual electricity costs (12 month contract)
EDF is a popular choice for energy in the UK. Not only is it one of the largest energy companies in the country, but it is the largest provider that specialises in the production of low-carbon energy.
British Gas is the most popular choice for electricity in the UK and they offer both fixed and variable tariffs.
Eon is another popular choice for electricity in the UK. Eon offers a range of fixed plans and a prepayment plan with a variable tariff.