What is the difference between standard variable and fixed tariff?
There are two options when it comes to energy tariffs. These options are fixed and standard variable tariffs. In a fixed tariff, the unit rates and standing charges remain the same for the duration of your contract with your energy supplier. If you use more energy, you pay more but the unit price and daily standing charges stay the same.
The standard variable tariff is offered to customers by default from the energy suppliers. Your energy supplier can change the rates of units for both gas and electricity during the duration of your plan. The energy supplier can change the unit rate at any time regardless of the wholesale energy price movement.
What are the pros and cons of the standard variable tariff?
With a standard variable tariff, you get the full benefit in your energy bill if the wholesale energy prices fall.
Standard variable tariffs might seem cheaper initially but they are going to keep increasing with energy costs. On the flip side, standard variable tariffs do not have exit fees. Therefore, if you find a better deal, you can switch without any penalty.
What are the pros and cons of a fixed tariff?
Fixed tariffs are usually cheaper than the standard variable tariff if you opt for one year to 36-months deals.
In the event of a sudden energy price hike, fixed tariffs protect you from that surge. This sounds like a good deal. However, the downside of the fixed tariffs is that most energy suppliers charge exit fees if you decide to change the energy supplier after the cooling-off period ends.
Furthermore, if wholesale energy prices drop and your energy supplier drops the prices as well, you won’t be getting any benefit from that price drop as your tariff is fixed for a certain period.
What is a single fuel energy plan?
A single fuel energy plan means that you are using an energy supplier for your electricity and another energy supplier for your gas. This is often the case if you find the cheapest gas tariff from one supplier and the cheapest electricity tariff from another one.
Although you might save a little by having separate energy suppliers for your household energy, you have to deal with double the admin. It means you have to keep track of two bills and their end dates and two energy suppliers to contact for complaints and other issues.
What is a dual fuel energy plan?
A dual fuel plan means that you get your electricity and gas from the same energy supplier. These plans can be found from various energy suppliers on both fixed and standard variable tariffs.
With a dual fuel plan, if you switch providers, you won’t feel any difference in service as all energy supplies provide their gas and electricity through the same wires and pipes. Also, you have to only deal with one energy bill to keep track of the readings.
Are dual fuel plans cheaper than single fuel plans?
You may find some single fuel plans that are a little cheaper than the dual fuel plans. However, the additional admin costs for single fuel plans can minimize the savings to almost zero when compared to dual fuel plans. Equally, many companies offer bonus savings on dual fuel plans. The key is to search and compare all options properly.
If you are on a fixed tariff, on a single fuel plan for both gas and electricity, you may also have to face two exit fees if you want to switch energy suppliers in the middle of the set contract term.
Therefore, you should do a proper search for energy suppliers who can offer you the cheapest tariffs either with single fuel or dual fuel. You can then compare these energy suppliers and make a sound decision.
Why do energy prices differ by region?
Energy prices differ by region in the UK. For example, an energy provider may charge you 17.2p in London, 16.8p in Newcastle, and 17p in Shrewsbury for a single electric unit.
These price fluctuations mainly depend on supply and demand. If you live in a region that has less population, the unit price per kWh shoots up as the energy suppliers reduce their cost of energy by buying in bulk for densely populated areas.
Secondly, the 14 distribution networks are owned by six different companies. Each of these companies charges a different fee to the energy suppliers. The variation in the fee impacts the unit price on your energy bill.
Northern Scotland, London, the South East, Merseyside, North Wales and South Wales have the highest energy prices in the UK.
The reason you see high energy costs is because it costs more in these regions to distribute the energy from the source to its destination. You can say that the further the energy has to travel, the more it will cost you.
The North West, East Midlands, North East, and Yorkshire regions have the cheapest energy prices for both gas and electricity.
What is the average energy bill per year?
On average, a rough estimate of electricity consumption is 8kWh to 10 kWh per day, while for gas consumption, the figure stands at 33kWh to 38 kWh daily
This means the average annual electricity consumption is around 3300 kWh and the average annual gas consumption is 12,900 kWh.
It is worth mentioning here that your energy bill could appear higher than just the rate charged because your supplier will add daily standing charge, taxes, and other costs to the bill as well.
What costs make up my energy bill?
The following costs make up your monthly energy bill.
• Wholesale costs (39.6%)
These are what you pay for the energy and gas brought to your home. Your supplier will buy gas and electricity from generators on the wholesale market.
• Network costs (23.8%)
These are for the gas pipes and electricity cables that carry energy across the country into your home or business. Network companies charge your supplier an Ofgem-regulated price for their use of the energy network. This money goes towards maintaining, running and upgrading the networks.
• Operating costs (18.4%)
Operation costs cover things like customer service, billing and the general costs of running an energy business.
• Environmental and social obligations costs (13%)
Larger suppliers have to help pay for government energy policies. These costs could cover schemes to support energy efficiency improvements in homes and businesses, help vulnerable people and encourage take-up of renewable technology.
• VAT (4.7%)
• Other direct costs (1.5%)
- third-party services, such as sales commissions and brokerage
- meter maintenance and installations
- administration from data and settlement services like Elexon and Xoserve
- wider smart metering program costs
What is a green energy supplier?
A green energy supplier ensures that the electricity and gas you use comes from renewable sources such as solar power, wind power, hydroelectric, geothermal, tidal, and biomass.
If you choose to go with a green energy supplier, it does not mean that all the energy will come from renewable sources. The UK National grid pools all power stations. Therefore, you will be getting your energy within that pool and there is no guarantee that all of it is green.
How to decide which is the best green energy supplier?
Green energy does not have to be costly. To find out which one is the best green energy supplier, you should compare the fuel mix of different green energy suppliers and select the cheapest tariff.
You can also find out what type of energy the suppliers are using as they all have to report to Ofgem and let them know exactly how the energy is generated. This will allow you to find out the energy suppliers who are truly green and are not relying on gas or coal.
Furthermore, if you want some green gas too, you can check if your green supplier is a member of GGCS (Green Gas Certification Scheme). This will make you sure that you’ll get some green gas along with normal natural gas.
How can I switch my energy supplier?
If you are not satisfied with your current tariff or plan, you can switch your energy supplier for a better deal. You need the following details.
• Your complete address
• Name of your current energy supplier and tariff
• Average energy usage per year
• Payment details
Next, you need to do an online energy price comparison and select the best tariff that works for you. Otherwise, you can contact the new energy supplier directly to do the switching as well. Normally, it will take 16 to 18 days to switch your energy supplier.
Can I use the same energy supplier when I am moving home?
If you decide to move home either in the same region or a different one, you need to inform your energy supplier 48 hours in advance. Within that period, they will close your account or make amendments to the contract for your new home.
It is a great idea to take the last meter reading so that you can get an accurate next bill in your new home. Once you are moved into your new home, contact your energy supplier again so that the new changes can take effect. Alternatively, you can shop around for new better deals from other energy suppliers as well.