There really is no set answer to "who is the cheapest" or "who offers the best energy deal" as it changes on a daily basis and varies by customer e.g. whether you're a single fuel (e.g. electricity only) or dual fuel customer, what type of energy meter you have e.g. prepayment meter or smart meter, where in the country you live, how much energy you use and how you pay for your energy e.g. monthly direct debit.
To start your energy price comparison you will need:
1) To use an independent and Ofgem approved comparison website (of which TheEnergyShop.com is a founding member). A full list of accredited comparison services can be found here.
2) A copy of your latest gas and electricity bill and specifically:
a. Your annual consumption in kilowatt hours (kwhs) - this will be labelled as your "Personal Projection" or "Annual Estimate"
b. Your current energy supplier
c. Your current energy tariff
d. Your current payment method e.g. monthly direct debit
Once you have the above, enter in your current details starting with your postcode and house number. This enables the comparison website to determine which PES region you are in. There are 14 PES regions across the UK each carrying different unit rates for the energy you consume.
If you do not know who your current energy suppliers are, the click here to find out who suppliers your electricity and gas.
The list of variables is significant and includes things such as:
• The energy supplier's pricing strategy i.e. whether they operate in the spot market or whether they hedge and buy in their energy in advance.
• Global energy conditions such as the price of gas which is supplied from around the world in which we're therefore competing against other countries to bring this gas in to enable us to generate electricity (remember around 50% of the UK's electricity is still produced using gas in through "Combined Cycle Gas Turbines" - CCGT.
• The increasing use of renewable energy also plays a role meaning the UK can rely less on imports from mainland Europe if our own renewable energy sources are working to full capacity such as solar, hydro and wind.
• Demand plays a huge part in it too and thus is impacted dramatically by the weather. If our demand surges during a cold snap and we don’t have sufficient storage capacity this can impact the price of energy passed through to consumers.
With the above examples of key factors effecting energy prices, the best advice for consumers is to opt for a fixed rate energy tariff. In doing so, you are protecting yourself against the unknown macroeconomic factors meaning the price you pay for each kilowatt of energy used remains the same for the duration of your tariff. This does however mean that should energy prices fall you won't reap the benefits but even then you can always terminate and switch energy suppliers again. However, please note, this may carry a termination fee of around £35 per fuel so please be sure to check this out beforehand. To benefit from falling gas and electric prices, you will have to switch to a variable rate tariff.
The energy delivered to your home isn't the responsibility of your energy supplier and instead is carried out by your Distribution Network Operator. Therefore, really all you are selecting an energy supplier for is:
1) To determine the price you pay
2) To provide you with good customer service
3) To provide an easy user-experience to check and pay your utility bills
4) To help the environment through a more environmentally friendly fuel mix - you can find details about your suppliers fuel mix here.
In terms of the suppliers available, you really have two categories:
The benefits in our opinion are that there is potentially more risk opting for a smaller supplier as they may not have the infrastructure to handle an influx of customers meaning, whilst their prices may be competitive, you may not get a good user-experience and there is always the risk of them collapsing. Alternatively, some of these guys are really raising the bar in the energy industry and have been set-up by people looking to simplify and improve the UK energy market by providing:
The biggest step is to make sure you're not on your energy companies standard, or default, energy tariff. Anything on your energy bill saying "standard" is a guaranteed sign that you are paying too much and you need to compare energy prices ASAP.
You also need to ensure your energy bills are accurate by making sure you are submitting regular meter readings. If you have a smart meter (latest statistics show there are now 14 million installed in domestic premises), this will be happening automatically but if not you need to take a reading and call your energy supplier or submit it online. If you have a gas meter, and want to know how to convert the reading in to kilowatt hours, use our handy gas units converting tool.
Next step is to focus on the energy efficiency of your property and knowing when and where you are using most of your energy. Our energy saving tips can provide you will you need to know to reduce your energy consumption and therefore save money.
If you currently have two separate energy suppliers, you could benefit from transferring this to one supplier on what is called a dual fuel tariff. This means both your gas and electricity is on the same tariff and billed together.