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It’s important to regularly compare electricity prices to make sure you’re getting the best possible deal. Remember that, unlike with other services such as broadband or TV, switching providers doesn’t mean a change in product quality – but going with the cheapest provider might mean sacrificing good customer service, so be mindful of this! When comparing electricity prices, it’s not (always) as simple as comparing the monthly or annual rates advertised, as there are a wide range of factors that will affect the cost of your household electricity bill. In this article, we’ll take a look at these factors, and give you some hints and tips when comparing electricity prices.
Last updated: February 2021
Comparing electricity prices at home can seem daunting. In this article, we take a look at some hints, tips and tricks to get you started.
To get started with comparing electricity prices at home, it’s important to gain a thorough understanding of what you’re looking for. Next, we’ll look at what electricity and energy tariffs are, as well as the key components that will help you find the best electricity prices for your household.
Energy tariffs explained
Every energy supplier has different energy tariffs; these range from the type of fuel and your postcode to whether your contract is fixed or variable in price and contract length.
A fixed rate tariff is set at a certain monthly, quarterly or annual cost which won’t change, even if the market goes up or down. These contracts are set for a set period of time (12-24 months) and will generally charge you exit fees if you leave early.
A variable tariff can go up and down, according to the market. So, while they’re often cheaper (particularly when the market is down), you could be in for a shock if energy prices are increasing. However, they do come with the flexibility of being able to leave or switch providers at any point, without hefty exit fees.
More than ever, our team of experts remain on deck to help you make savings on your energy. We understand how deeply the lives of many are affected by these trying times and we want to support you the best we can. More on your energy supply during COVID-19 in our article.
Energy costs breakdown
While there are a range of factors that will dictate your electricity, gas or dual fuel energy bills, there are a couple of considerations that are important when comparing electricity prices and energy tariffs. The main two points of comparison are the cost per kWh or unit of energy spent, and daily or standing charges. We explore both of these, below.
Kilowatt-hours or kWh is a measure of your energy usage. Despite the name, it doesn’t matter how many ‘hours’ of energy you use, a kilowatt-hour is equivalent to the amount of energy you’d use if you kept a 1,000-watt appliance on for an hour. So, if you were using a 50-watt light bulb, it would need to be on for 50 hours to use 1 kWh.
Generally speaking, a 1 bedroom household would use around 250 kWh a month, 3,000 kWhs a year, and a 2-3 bedroom household would use 3,500 to 4,000 kWh a year. If you’re still not sure, your annual energy review from your current provider should tell you how much energy you used last year for your electricity, gas or dual fuel.
Standing charges are a fixed daily amount that is chargeable, no matter how much electricity or energy a household uses that day – even if they use none at all or the house is unoccupied. The point of the standing charge is to cover the costs needed to source and supply your electricity, including maintaining the network infrastructure and the customer service teams.
If you only use electricity, you’ll pay one daily standing charge, but dual fuel energy users (gas and electric) will have separate daily standing charges for each fuel.
Typically, your standing charge for electricity will be somewhere between 5 and 60p a day, with gas being 10 to 80p a day. While the large majority of providers use standing charges, there are some newer energy suppliers who don’t – but, be mindful that their operational costs may be passed on to you still as part of your fuel price, so be cautious!
How to compare electricity prices at home?
To compare electricity prices from home, there are a few different methods. You can use comparison tool to input your information and find a range of quotes from all energy providers, you can research each brand’s website, reviews and get a quote from each individual, or you can spend less than five minutes giving Switch Plan a call, who will manage the switch for you!
While researching the brands yourself might seem straightforward, there are a few downsides to consider…
- Comparison tools aren’t always transparent with the full pricing
- You may end up on an unsuitable tariff for your household by choosing the cheapest option
- Extra charges may be incurred for smart meter installations, paper bills or high exit fees
- You may end up with a long-term fixed contract with high exit fees
- You might have to have the awkward break-up conversation with your current provider!
However, by giving Switch Plan a call 0330 054 0017, there are a range of easy benefits!
- Easy, quick and efficient initial call, in ten minutes
- You can relax, while we find the best deal for you, your household and personal circumstances
- No hidden fees or unexpectedly high energy bills
- It’s free to switch!
Factors to consider when comparing electricity prices
It’s important that if you do decide to compare electricity prices by yourself, that you look out for the following factors that may change the total price paid:
Make sure to think about…
- Your payment method: direct debit or prepayment meter?
- Paperless vs manual billing
- Smart meter vs manual readings
- Contract length – for fixed tariffs
- Possible cost increases – for variable tariffs.
Is there a cooling-off period when switching?
Yes, as of 13 June 2014, UK law says that there is a 14 calendar day (not working day) cooling-off period for gas and electricity customers, throughout which your previous energy provider needs to continue providing their services to you.
How long does it take to switch energy providers?
Once you’ve signed up with your new supplier and notified your previous supplier of your intent to leave, it takes an average of 21 days in the UK. Often, it’s quicker and your new energy supplier will start once your cooling-off period has ended (after 14 days).
Who is the cheapest electricity supplier in 2020?
Energy prices fluctuate so quickly that it’s really tricky to nail down the cheapest, it also varies wildly based on postcodes. For example, did you know that energy in Yorkshire is more expensive than in the South-West of England?
Cheap electricity providers
Although it varies depending on a variety of factors that we’ve outlined above but, based on an average consumption of 3100 kWh and monthly direct debit payments, these are the five cheapest electricity tariffs (as of November 2020).
|Energy Provider||Tariff Name||Standing Charge||(Avg.) Monthly Cost|
|E.ON||Fix Online Exclusive V52||
|PFP Energy||Green Variable V1 Online||
|EDF Energy||Simply Online 1 Year Fix Nov21v2||
|Pure Planet||100% Green 12m Fixed Nov20 V1||
|Green Network Energy||GNE Awesome Autumn||
Should I switch to the big six?
You might be more comfortable with using one of ‘the big six’ energy providers that are household names, and with so many market disruptors and newcomers to choose from, it can feel overwhelming!
However, it’s important to note that UK energy regulator Ofgem found that the standard big six tariffs were up to £267 more expensive than those from providers outside of it – so it’s often worth considering a smaller brand, who will also have lower operating costs, which helps to create lower energy bills for their customers!
What is the energy price cap?
The energy price cap was introduced by the UK government in January 2019, with the intention of setting a maximum on the amount that energy suppliers can charge for their standard variable tariffs (SVTs), as these can fluctuate regularly depending on the market.
The energy price cap doesn’t affect fixed rate tariffs, as these are usually cheaper than variable tarifs. The cap rate is set by Ofgem and is reviewed twice a year, and on 1 October 2020 it was reduced from £1,126 (as set in April 2020) to £1,042 a year.
Essentially, it protects customers from paying too much for their energy, and encourages energy suppliers to pass on any reductions in the costs of supplying energy to their customers.
Updated on 24 Feb, 2021