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The charts displayed below highlight how energy prices have significantly fallen and stabilised. With predictions by Cornwall Insight suggesting that prices will increase in January 2024. Beyond this date, it is a heavy guessing game and prices could go up or down.
If you’re looking to secure a cheap energy deal, selecting the right tariff type could help you reduce your costs. When you compare energy tariffs, it’s important to consider how and when you use your gas and electricity.
For example, if you use most of your energy at night, switching to a multi-rate tariff could help you save money. Below, you can find information on some of the most common types of gas and electricity tariffs.
Fixed rate tariffs lock in the price you pay per unit of energy (kWh) for a certain period of time, protecting you from wholesale energy price hikes. This offers you certainty and means you don’t have to worry about price increases during your contract.
Green energy tariffs have become increasingly popular as we put more focus on our environmental impact. Some suppliers will offer 100% renewable electricity, putting naturally sourced energy back into the grid. A renewable tariff may also include carbon-offsetting. This involves your supplier funding projects that help tackle carbon emissions to offset the gas customers use.
An Economy 7 tariff aims to provide cheap energy deals by giving you cheaper energy rates for a seven-hour window during the night. The off-peak hours and the discount offered will vary from supplier to supplier. It’s worth bearing in mind that Economy 7 peak rates tend to be much higher than regular energy tariffs.
Your standing charge is a daily fee which covers the cost of maintaining your energy supply. A no standing charge tariff sets this daily fee to zero. This can be beneficial for properties where most of your energy is used seasonally or for only a few days a week. Unit rates on a no standing charge tariff can be higher than those on standard tariffs.
Standard variable tariffs are also known as default tariffs and are often the deal your energy supplier puts you on if you haven’t specified your preferred energy deal. Your unit rate will vary depending on the current wholesale costs throughout the duration of your contract.
Prepayment meters are installed in your home, allowing you to become a ‘pay as you go’ energy customer. Prepayment meters are powered by a ‘key’ or smart card that is topped up and inserted into the meter to power it. Whereas credit meters allow you to spread energy costs evenly over the year, prepayment meters require you to pay for your exact usage.
A dual fuel tariff means that you can purchase both your gas and electricity from the same supplier with the same energy tariff. Suppliers will often offer a discount for taking out a dual fuel tariff with them.
Dual fuel tariffs are only available to homeowners and are not offered on energy deals.
This type of energy deal is a product of the Feed-in Tariffs (FIT) government scheme designed to promote and encourage the implementation of renewable and low-carbon electricity generation technologies. A feed-in tariff is available for anyone who has installed their own method of renewable energy generation, such as solar panels.
Breaking down your energy bills to help you understand what drives the cost of your bills.
You can find plenty of useful information in our handy energy guides.
This guide helps you identify the different types of meters and how to read them.
There are some significant differences between fixed and variable tariffs. This guide will help you decide what the right one for you is.
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The best time to switch energy suppliers will depend on your individual circumstances. If you haven’t switched for a few years, you should compare energy prices to make sure you’re on the best deal available to you.
For those on a fixed term contract, the best time to switch will be when your renewal window opens and you have no exit fees to pay. If you allow your contract to expire, you’re likely to be placed on your supplier’s standard variable tariff. This tends to be one of the most expensive tariffs your supplier offers.
The length of time it takes to switch can depend on whether you’re a business or domestic user, and on your tariff type.
Guidelines such as the Energy Switch Guarantee offer an agreement with suppliers to complete domestic and business energy switches within 5 working days. The process can take longer where extra work is required to complete your switch. This could include installing a new meter at your premises.
Most energy deals will include exit fees for ending your contract early before your renewal window. For business users, early cancellation fees can be significant.
However, you will not be charged an exit fee by your supplier if you switch during your renewal window. Your supplier should make you aware of when your renewal window and provide information on how your energy costs will change should you fail to switch.
The Energy Switch Guarantee is a voluntary set of promises that suppliers can sign up to make sure switching energy is as simple as possible.
When signing up to the guarantee, suppliers agree to a number of promises and targets including:
Your monthly Direct Debit to your energy supplier is just a ‘estimate’ cost that’s suggested by your supplier to cover the monthly energy you’ve used - it’s never completely accurate.
At the end of winter, you might be in debit, which is the exact opposite of credit. Debit is incurred when your monthly Direct Debits aren’t enough to cover your usage. This is completely normal, and irons itself out when the warmer months come and you start using less energy.
the government have announced an Energy Price Guarantee which will see energy bills frozen at £2,500 (based on typical UK usage) from 1st October 2022 until 2024.
However, the price cap has been reduced below the guarantee. This means that the price cap is now active over the guarantee.
The energy price cap is a limit on how much your supplier can charge you for the gas and electricity you use on a default energy contract.
In the vast majority of cases, all you need to do is ask. Industry regulator Ofgem has rules that force suppliers (including any of your previous ones) to refund you credit if you ask, unless they have very good reason not to.
Comparing multiple energy suppliers and tariffs is the best way to find competitive gas and electricity deals.
In 2023, energy prices are much more stable and are up to 69% cheaper than October 2022. Now is a great time to switch domestic and business energy tariffs.