Energy Tariffs Guide
With so many energy tariffs on the market and changing prices, it can sometimes be confusing to know which to choose. In this guide, we break down exactly what each energy tariff means.
Variable Rate Tariffs
A variable rate tariff means the price you pay per unit can go up or down. If prices all of a sudden drop, you will benefit from lower energy bills. However, you are fully exposed to market increase which can see your energy bill rise.
Fixed Price Energy Tariffs
As it says on the tin, these fixed energy tariffs offer a "fixed" unit rate meaning you continue to pay the same unit price for the duration of the tariff. That may be 12-months, 18-months or further out as defined by the energy tariff you apply for. However, please note that once your "fixed" tariff expires, you will automatically be placed on your existing supplier's "Standard Variable" rate tariff. As such, it's essential you make a note of your expiry date and switch to an alternative tariff to keep your bills low. NOTE: Doing this too early can result in an "early exit fee" which could be as high as £50 per fuel.
Dual Fuel Tariffs
This is simply a tariff that covers you for both your gas and electricity. This means your bill is with one supplier on one tariff. The alternative to this is having two single fuel tariffs – one for your electricity and one for your gas.
Prepayment Energy Tariffs
The "Pay As You Go" of the energy market. Usually topped up with a key or a token at a local shop, this is a meter which requires you to put a balance on to the prepayment meter to cover your energy costs. Due to the maintenance of these meters, they usually carry a high unit price than "standard credit meters". Once the balance expires (as can be viewed digitally on the meter itself), you run the risk of losing power although you do get an emergency button to cover you for a short-period of time of perhaps £5.
Economy 7 Energy Tariffs
A great option for those working shifts, who have an electric vehicle and who can set their appliances to work at set times. That's because these Economy 7 tariffs offer cheap "off peak" unit prices when the grid is quiet through the night meaning huge savings can be made if you can utilise this cheap energy. Properties with an immersion heater to heat their hot water system can also benefit from an Economy 7 (E7) meter meaning they can heat their tank during the night for potentially 50% less than it would be during the day giving them cheap hot water.
Capped Energy Tariffs
This means your energy bill can come down but is locked at a certain limit on the way up meaning the price it can move up to is "capped". Let’s be honest, we're all fine with our energy bills going down but nobody wants to see them go up and end up seeing their energy bills increase.
Green Energy Tariffs
Growing in popularity and demand, green energy tariffs are linked to renewable energy meaning the energy generated for them is done so through renewable means such as hydro (water), wind or solar to name a few. These tariffs can often carry a premium due to the cost of green energy but this is reducing as efficiencies are found in generating renewable energy.
How to find the best energy tariff for you
There are so many variables to this that there is no one set solution. To get the very best comparison, we recommend having a copy of your energy bill to hand and ensuring your meter readings are fully up to date. Only be entering 100% accurate data can you get a truly accurate view of the best deal for you. This means having the following details to hand:
- Energy Supplier Name
- Current Energy Tariff
- Current Payment Method e.g. Monthly Direct Debit
- Annual Electricity Usage in Kwh
- Annual Gas Usage in Kwh
You then need to ensure you are using an Ofgem approved energy price comparison website to ensure you are getting a full market view. TheEnergyShop.com has been accredited since 2003 but a full list of all websites can be found here.