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Guide to comparing electricity

Households typically consume energy in two ways: electricity only, or electricity and gas.

As such, energy bills for households are typically offered in three formats: electricity only, gas and electricity separately or dual fuel, which combines your electricity and gas costs into one bill. Whether you only use electricity at your home or use both electricity and gas, comparing electricity prices and switching suppliers can help cut the cost of your household energy bills.

Most energy brokers provide a comparison service or tool where you can compare tariffs across energy suppliers and switch to the cheapest deal on offer. All energy suppliers also display available tariffs on their website. In order to find the best electricity supplier for your household, you’ll need to provide your broker or supplier with your postcode – and it will help to have a copy of a recent energy bill to hand. If you don’t have an energy bill, you may be asked to provide all or some of the following details:

  • Your postcode.
  • The number of people living in your household.
  • The size and type of your home.
  • The main source of energy for your home.
  • The amount of time you spend at home.
  • What type of plan you’re currently on.
  • Whether you have a prepayment meter installed.
  • The amount you currently spend on energy.

The above details will help potential energy suppliers create an estimate of your usage. However, you’ll get the most accurate results if you use your most recent energy bill to provide your electricity consumption in kWh. 

Comparing Electricity Prices

There are two charges that make up your electricity bill and affect the price you pay for your electricity: the standing charge and the unit rate. The unit rate is the amount you pay for each kWh of electricity you use, while the standing charge is a daily charge applied to your bill by your supplier that you’ll always pay regardless of how much energy you use. When comparing energy prices, you’ll need to take both of these charges into account to make sure you’re getting a fair deal – but the unit rate is the one which will have the biggest impact on your bills.

You may find that the method of payment you use can also affect your energy bill. The cheapest way to pay your electricity bill is usually through monthly direct debit, with suppliers often offering discounts to those who choose to pay this way. Managing your account online can also help you get a discount.

However, it can be difficult to figure out the cheapest – or best – electricity tariff for your household. Suppliers offer a wide range of tariffs, some of which will be more suitable for your household than others. The best way to ensure you’re picking the tariff most suited to your household is by providing the most accurate information possible regarding your usage. This allows suppliers and brokers to determine the best electricity tariffs available for your needs and location. 

Comparing Electricity Tariffs

There is a range of different tariffs – also known as price plans – available from energy suppliers. While every supplier charges different electricity rates, the same supplier may also charge different rates depending on the specific tariff they’re offering. Tariffs you may be offered include:

Standard tariffs: your supplier’s default, standard tariff is usually also their most expensive. There are two scenarios in which you’ll be on your supplier’s standard tariff: 

  • You’ve never switched your supplier or tariff before.
  • A fixed rate tariff you agreed to in the past has expired, and you haven’t agreed to a new tariff since.

Suppliers should make it easy to switch in these scenarios as standard tariffs shouldn’t require an exit charge to be paid – and there is no fixed tariff length. A standard tariff may also be referred to as a variable tariff.

Fixed tariffs: this tariff ensures the amount you pay per unit of electricity is the same for the entire length of the tariff, regardless of whether the market price is going up or down. In essence this enables you to freeze your energy prices until the tariff expires. You can also choose to get a fixed dual fuel tariff where you fix the price of both your gas and electricity units. However, in both cases you may have to pay an exit fee if you choose to switch before the tariff period ends.

Capped tariffs: with this tariff, the price you pay for each unit of electricity changes with market prices, but gets capped at a certain level, so you’ll never pay more than a certain amount for your energy. Unlike fixed price tariffs, this allows you to benefit from falls in energy prices. With capped tariffs, you may also need to pay an exit fee if you choose to switch before the end of the tariff period.

Dual fuel tariffs: dual fuel tariffs combine your electricity and gas under one supplier and one bill. This can make it easier to manage your bills as you’ll only need to deal with one company and won’t need to remember multiple dates. You can also get a fixed dual fuel tariff, freezing prices for both fuels. If you prefer to stick with one supplier, a dual fuel tariff can be less expensive than buying electricity and gas separately from that same supplier. However, you may be able to get a cheaper deal by purchasing gas and electricity from separate suppliers.

Economy 7 tariffs: this tariff enables you to pay less for energy you use at night – specifically in a set seven hour period. This means your unit rate at night is cheaper than the rate you’ll pay for electricity used in the day, although your standing charge will always be the same. The Economy 7 tariff requires a special meter fitted in your house, and can be useful if your house is empty for most of the day.

Economy 10 tariffs: similar to the economy 7 tariff, this tariff offers cheaper prices for ten hours in every 24 hour period. The discounted hours are spread out throughout the day, with suppliers typically selecting three hours in the afternoon or evening for which you’ll pay a cheaper rate, with the other seven hours made up overnight. Economy 10 tariffs are not offered by all suppliers and you may be charged for installing a special meter.

Prepayment tariffs: this allows you to pay for energy in advance using a top-up card or key. This can be done at your convenience in a nearby shop or Post Office, or sometimes online. Prepayment tariffs are often offered to customers with poor credit scores or low incomes, however the average cost of energy can be higher as you won’t benefit from your supplier’s lower-priced deals. Your supply may be cut off if you fail to top up.

Green energy tariffs: these use either 100% renewable energy or a mixture of renewable and non-renewable sources of energy, and are a convenient way of reducing your carbon emissions.

Online tariffs: typically, online tariffs are offered at discounted rates due to the lower administrative cost for your supplier. All your account management is done online, including completing payments and entering your meter readings.

Comparing Electricity Suppliers

In addition to price, you may want to consider customer service and the supplier’s fuel mix when deciding who to switch to. While the latter is published annually on suppliers’ websites, the former can be more difficult to determine. A number of independent websites and forums discuss the quality of service that customers receive from their energy suppliers. Energy brokers also tend to display customer satisfaction information for each supplier when displaying prices for comparison.

Independent consumer rights charity Which? carried out a survey of more than 9,400 energy customers in September and October 2014. They asked the customers about the service they received from both the Big Six energy suppliers – British Gas, Scottish Power, SSE, EON, Npower and EDF Energy – and the smaller companies that provide energy across the UK. One of the factors they looked at was customer service, rated between one and five stars.

None of the five providers that received five stars were part of the Big Six. Instead, Ecotricity, Good Energy, Ebico, Ovo Energy and Utility Warehouse topped the survey for customer satisfaction. SSE was the highest ranking member of the Big Six, achieving four stars out of five. EON, British Gas and EDF Energy each received an overall three stars while Scottish Power received two stars and Npower came last with only one star.

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