How to reduce your energy bills
HOW TO SAVE MONEY ON YOUR ENERGY BILLS
SAVING MONEY ON YOUR UTILITY BILLS.
In September 2013 the average domestic fuel bill was £1420 a year. In October Oftgem wrote that in the last three years energy prices had increased by an average of £300 a year. Over the next year the cost of both gas and electricity is predicted to rise sharply. The cost of gas will rise to an average of nearly £850 a year and electricity to around £620 a year. Seven years ago the average annual price of domestic gas was just £550 and in May 2006 your average annual electricity bill was £400.
Most people can reduce their gas and electricity bills by up to 25% simply by switching to a cheaper provider. This represents an average saving of around £355 a year, yet two thirds of people seldom, if ever switch their energy provider!
How to switch energy providers.
In order to compare energy providers you have to know how much energy you are currently using a year. You will need the following information, which can be found on your energy bill or statement:
a)The name of your supplier or suppliers.
b)Name of the tariff or plan you are on.
c)The amount of gas and electricity you have used in the last 12 months, measured in kilowatt hours (kWh).
You may also require:
If you are on Economy 7.
If you are on mains gas.
How you pay your bills.
Your bank details.
In order to locate and identify your unique gas and electricity meters you may also require your MPAN electricity meter number and your MPRN gas meter number.
Different types of energy tariffs.
Your new provider will want to know which energy tariff is most appropriate for your needs.
Gas and electricity tariffs may include:
Economy 7 and 10.
These tariffs are fully explained in the Which website given below, under ‘Energy tariffs explained’.
Paying for your energy.
There are many ways to pay your energy bills.
You can choose to pay your energy bills by:
Monthly or quarterly fixed direct debit.
Variable direct debit.
Cash or cheque.
Credit or debit card.
Again details of these payment methods can be found on the Which website under, ‘Energy bill payment methods’.
Your energy bill.
The information you need to compare and change your energy provider can be found on your gas and electricity bill or bills if you have different providers for your gas and electricity.
A typical energy bill is shown below.
If we take a look at the Scottish Power bill we can find the name of the energy supplier in the left-hand top corner – ScottishPower.
The tariff or plan is shown below the blue ‘Your gas and electricity statement, actual use’, sentence near the top of the bill. It states that the person is on the ‘Standard-Monthly Direct Debit package’.
The amount of energy used over the previous 12 months is shown at the bottom of the bill, under ‘Your energy use’. It states that in the preceding 12 months this householder used 15799 kWh of gas and 5216 kWh of electricity. It also gives the estimated cost of gas and electricity over the next 12 months.
The postcode for the address is shown at the top of the bill.
The customer is not on Economy 7 and uses mains gas.
Their bills are paid by monthly Direct Debit.
The electricity meter MPAN and gas meter MPRN numbers are shown on the bill.
The bill tells us that the customer supplied meter readings to the supplier. The dates and details of these readings are shown on the bill. Some meter readings may indicate that the reading was taken by the customer (C), the energy supplier (A) or estimated (E). It is a good idea to provide your energy supplier with actual meter readings as estimated readings can be inaccurate and can result in sudden and unexpected rises in your energy bills.
The above information can also be found on your annual statement.
A Scottish Power Annual statement is shown below.
Sample statements for British Gas, EDF, Eon, Npower and SSE can be found at www.which.co.uk/switch/energy-advice/understanding-your-energy-bill website.
This site also gives instructions on reading your gas and electricity meters – see left-hand column of webpage under ‘How to read your gas meter’ and ’How to read your electricity meter’.
The website also contains information on how to estimate your energy usage under, ‘Estimating how much energy you use’.
If you are unsure where to locate the information you need to switch energy suppliers, your current energy provider will be able to provide you with the information. Just give them a ring; their phone number will be on your bill.
Do check to see if your current provider levees an exit charge or cancellation fee for canceling your current deal. Cancellation or exit fees are common with capped and fixed term deals.
Decide if you want a supplier that provides:
Paperless online billing.
Online account management.
Dual gas and electricity. You may be offered a discount of up to £60 a year if you opt for a dual fuel tariff.
Your bill may be reduced by up to 10% if you decide to pay monthly by direct debit.
You now have the information you need to compare, contrast and switch energy suppliers.
Time to switch.
You now need to compare energy provider’s deals and tariffs using a suitable comparison website.
Websites that help you to switch energy providers are listed below.
Chose at least two comparison websites, because not all websites cover all providers.
The procedure for switching is simple.
Log onto a comparison site and:
- Enter your postcode.
- Enter your current gas and electricity details.
- Select your preferred type of energy and payment method. You need to decide your tariff, payment method, billing, account management and any other consideration, such as green energy.
- The comparison website will search all available energy suppliers in your area and bring up a table of results. This list will include all the additional benefits each energy supplier is offering.
- Repeat this procedure using at least one other alternative comparison site.
- Select your chosen energy provider.
- Click on the energy provider’s icon to sign up for your chosen tariff.
- Complete the application form.
A worked example.
Mr Brown lives in a 3 bedroom detached bungalow in a large village in the East Midlands.
He currently pays £1667 a year for his gas and electricity.
Mr Brown clicks onto the Moneysupermarket.com website and clicks the ‘energy’ icon near the top of the page.
He then clicks ‘compare gas and electricity’.
Under the ‘Switch energy supplier’ icon he clicks onto ‘read more’.
He then clicks onto the blue ‘lower your bills’ icon near the centre of the screen.
Mr Brown enters his postcode into the box on the screen. This brings up a ‘find address’ message, which he clicks and then selects his address from the list provided.
Mr Brown is a dual fuel user, when asked ‘What would you like to compare’ he clicks on the ‘gas and electricity’ icon on the screen.
Below he is asked if he has the same supplier for gas and electricity. He clicks the ‘yes’ icon.
Under ‘Please tell us your current supplier’ he selects ‘Scottishpower’. If his current supplier was not listed he would need to click onto ‘Show more suppliers’ to find alternative suppliers.
The next question is ‘Tell us your current payment method’. He selects ‘Quarterly cash or cheque’.
Asked if he has an Economy 7 tariff he selects ‘No’.
When prompted to indicate his current tariff he selects ‘Standard SC’. If he was unsure he could have ticked the ‘I don’t know’ box or contacted his current supplier.
He is next prompted to provide figures for his current energy consumption. Since Mr Brown has his last 4 quarterly bills and annual statement to hand he clicks ‘I know my usage’. If he did not have that information he would click on ‘Help me estimate’.
Mr Brown clicks on the ‘spend’ arrow, under ‘Your gas consumption’, and clicks on the ‘use (kWh)’ icon. He then clicks on the ‘month’ icon and selects ‘year’.
Next he inputs his annual gas usage, in kWh, into the box. This information comes from his annual statement. He inputs ‘21120’ into the box.
He then completes the ‘Your electricity consumption’ information, entering 4224 kWh per year into the required field.
He is then asked, ‘How would you like to pay for your energy’. Although he currently pays quarterly, cash or cheque, he decides to select ‘Monthly Direct Debit’ as this is normally the cheapest and most convenient payment method.
Next he is asked if he wishes to view products available through www.moneysupermarket.com. Since he does not wish to limit his search he selects ‘No’.
He then enters his email address – the search results will be emailed to his email address.
Finals Mr Brown is asked if he would like to be contacted with money tips and offers.
Finally, he selects the ‘See results’ icon.
A list of 50 energy tariff offers is shown on the screen. The supplier, energy tariff, estimated annual bill and annual savings are displayed.
Mr Brown’s cheapest provider is Energy Spark, which offers a monthly rolling variable rate tariff costing £1379 a year. On this tariff Mr Brown would pay £288 a year less than his current provider. Mr Brown cannot contact this company directly through Moneysupermarket.com, he would have to contact them directly, via their website.
However, Mr Brown is concerned that variable tariffs charges can rise suddenly and dramatically. Price hikes of 8% to 9% are quite common. He therefore decides to opt for a fixed rate deal with First:utility. His savings are reduced to £256 a year, but he does enjoy greater peace of mind as his payments are fixed until the end of April 2015. In effect, he trades £32 additional savings for the peace of mind knowing his monthly bill will not rise until May 2015.
Mr Brown clicks on the ‘Show more details’ icon and notes that online account management is available and that there is an exit fee of £60 should he cancel his account prior to April 2015.
He is happy to accept that restriction and clicks on the ‘Apply now’ icon.
The monthly payment is set at £118, payable by Direct Debit.
He is asked to provide his personal details, if he has any special needs, his email address, telephone number and security questions. He is also asked if he has a Smart Meter and billing information.
How long does the process take?
To switch energy providers takes between 4 to 6 weeks.
To complete an online search and switch energy suppliers takes no more than 10 minutes.
20% of customers save in excess of £300 a year by switching energy providers, and it is a very simple and easy process.
Mr Brown could have saved £288 a year if he had opted for the cheapest provider, but I think he was very sensible to go with a fixed tariff. Only yesterday one of the main energy providers announced a sudden price rise averaging 8.2%!
By taking 10 minutes to complete an online search and switch energy providers Mr Brown saved £256 a year – £21.33 a month. That is £25.60 for every minute online.
£256 may not seem like a massive saving, but it is £256 you would not have saved had you not switched. It represents a 15% saving.
Some suppliers offer incentives to switch, see www.moneysavingexpert.com website for more details.
Alternative renewable technologies.
You can reduce your energy bills by obtaining some of your energy from alternative renewable technologies.
Air source heat pumps absorb heat from the outside air. This heat can be used to heat radiators, under floor heating, or warm air convectors and hot water for your home.
Ground source heat pumps use pipes buried in the ground to extract heat from the soil.
Biomass systems burn wood pellets, chips or logs to provide heat.
Solar thermal heating use solar panels to collect and store heat from the sun. South facing panels are best. A conventional heater or boiler would be needed for those periods when solar power was insufficient.
Solar photovoltaic (PV) use electrical photovoltaic cells to capture the sun’s energy.
Hybrid air source heat pump and gas systems integrate an air to water heat pump with a gas boiler to create an efficient domestic heating and hot water system.
Wind turbines generate and store power from the wind.
For further information on these technologies check out www.energysavingtrust.co.uk.
A strategy for lowering your fuel bills:
In addition to changing energy providers and embracing alternative energy technology there are many other practical ways to lower your energy costs:
1. Complete a home energy check. See the Energy Saving Trust website for more details.
2. Measure the amount of electricity your appliances and gadgets use by purchasing and using a home energy monitor. They cost around £40 from Amazon, Tesco and Argos. Some energy suppliers provide them for free if you sign up for certain tariffs.
3. Turn your thermostat down by 1 degree and you could reduce your energy bills by 10%, knocking up to £65 a year off your energy bills.
4. Turn your cylinder thermostat down to 60 c/140 F.
5. Take regular meter readings to avoid under and over payments.
6. Draw your curtains at dusk to keep the heat in and fit appropriate draught insulation around windows, doors and letter boxes.
7. Wear warmer clothing indoors. So sensible most of us miss it!
8. Turn off the lights when you are out of a room and switch off all appliances that are on standby.
9. Only use your washing machine, clothes dryer and dishwasher when you have a full load, and use the ‘economy’ cycle.
10. Only boil the water you need. Never boil a full kettle for one drink.
11. Fix any water leaks or dripping taps.
12. Use energy saving lights and appliances. The Energy Saving Trust has a list of recommended appliances, see www.energysavingtrust.org.uk/Take-action/Find-Energy-Saving-Trust-Recommended-products.
13. Only heat the rooms you use to the temperature you require. Don’t heat a bedroom to 70 degrees or heat your spare room to the same temperature as the rest of the property and fit reflectors to the back wall of your radiators.
14. See if you can get cash back on your energy payments – check out the www.quidco.com website.
15. Have your gas boiler serviced annually and if it is inefficient replace it with a brand new, efficient boiler.
16. Check the energy efficiency of your home by checking the Energy Performance Certificate (EPC) of your property. An Energy Performance Survey will help to identify ways to save and reduce your energy consumption.
17. Make sure your loft insulation is at least 270mm thick. Top up if necessary. Loft insulation will pay for itself over a two-year period.
18. A third of heat in uninsulated homes is lost through the walls. Homes built after 1920 generally have cavity walls which can be insulated for between £5500 and £8500. You should recoup this cost back over a four to five-year period. Solid walls lose more heat than cavity walls. You can insulate these walls for between £9000 and £13000. You should reduce your energy bills by £490 a year, for solid wall insulation and £460 a year for cavity wall insulation.
19. Get a grant. A number of schemes are available to help you make energy saving improvements to your home. With the Governments Green Deal you pay for improvements through your energy bills. The big 6 energy suppliers have their own scheme, the Energy Company Obligation (ECO), for people on certain benefits. Some local authorities offer grants to help with the cost of making energy saving improvements to your home.
20. If you generate some of your energy from renewable or green sources, such as solar power or wind turbine, you may be eligible for a Feed-in Tariff or Renewable Heat Premium Payment (RHPP).
Typical annual energy costs of certain common household appliances and gadgets are given below:
TV 32” LCD £28
TV 42” plasma £44
Satellite/cable or Freeview £35
Games console £39
Telephone-two hands free £39
100W light bulb £22
Florescent bulb £4
Electric room heaters £300
Immersion heater £250
Electric shower £118
Electric kettle £27
Fridge or freezer £18
Dish washer £37
Washing machine £11
Tumble drier £35
Steam iron £38
Vacuum cleaner £12
These are only typical examples, and actual costs will depend on your individual circumstances, appliances and usage.
Many people are aware that they can save money by switching their energy providers, yet 60% of people seldom if ever switch.
Never auto-renew your energy contract. Always check out your best deals using at least two
You can also reduce your energy bills by supplementing your energy supply using renewable and green technology and by simply reducing your energy usage.
Take steps to lower your energy usage by adopting some of the suggestions mentioned earlier in this article.
Adopting these suggestions should enable you to reduce your energy usage and cut the cost of your energy bills by around 30% saving you hundreds of pounds a year.
Finally, check out these useful websites:
Please feel free to share your experiences and post suggestions and comments on this site.
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