With the many ways that now exist to compare energy prices, UK consumers are turning to energy comparison sites as the simplest method to obtain the best possible price for their energy. In spite of recent demands for energy companies to make tariffs easier to understand, it is still very easy to get lost in the tariff maze. Here we explain the main tariffs and what potential effect they have on your energy bill.
Duel Fuel Tariffs
This tariff means that by obtaining your gas and electricity from the same supplier, a discount will be given on the usual price. This often gives you access to cheaper energy plans reserved exclusively for dual fuel customers.
The price you pay per unit on this tariff will be above the standard rate but you are protected from price rises that take prices above your capped rate during the period of your contract.
Fixed tariffs provide a guarantee that your energy price will not fluctuate up or down during the term of the contract. You will probably pay a per unit price above the standard rate but you will be protected from any price rises. The drawback is that if prices fall significantly you could potentially lose out.
Both the Capped tariff and the Fixed may have financial penalties for early withdrawal from the contract. You need to calculate this carefully if you intend to withdraw to take advantage of a significant price drop.
If you opt to manage your account entirely online and save your supplier the cost of preparing and posting paperwork to you, their savings will be reflected in a discounted rate for you.
Your energy company will provide you with a cheaper per unit rate for seven hours during the night. The exact hours for this off peak usage are determined by the individual company but often fall between 1 and 8am. This requires installation of a special meter that distinguishes between usage during economy seven hours and normal usage
The same as Economy 7 but the economy hours are extended in return for a higher per unit cost than Economy 7 or an increased standing charge. 3 of the economy hours can be daytime hours. For both Economy 7 and Economy 10 you need to ensure that more than half of your consumption is during economy hours to be able to make a significant saving.
This is a tariff for people who prefer to prepay their energy costs by using a special meter that uses cards, tokens or keys. Often used by people on lower incomes, this is a convenient way of ensuring that energy costs do not run out of control. It is also acknowledged as being one of the most expensive tariffs
Social Energy Tariff
This tariff guarantees that you get the lowest standard tariff available in your area. You need to be able to prove that more than 10% of your total household income goes to pay for energy costs.
Green Energy Tariff
This is a tariff for people who want to make sure that their energy is produced from sustainable and renewable sources. The basic per unit rate is higher but some of the money goes to the development of renewable energy sources, although the energy delivered to the home is not necessarily produced that way.
So here we have a breakdown of the main tariffs and what they mean. It is important that when it is time to compare energy prices, UK customers have at least a basic understanding of their meaning to get a head start on securing the cheapest energy package for their circumstances.