If you’ve have been with the same energy provider for some time, it’s likely you aren’t on the optimum tariff and you could probably be getting more for your money (or the same for less money) either switching to a different tariff with the same provider or switching to a new energy supplier completely.
Tariffs vary depending on the energy supplier and also and the type of meter you have. Choosing the right tariff for you could mean a significant reduction of several hundred pounds annually on energy bills however.
When choosing the best tariff, usually you will need to consider your energy usage, whether to combine your electricity and gas bills, your preferred energy source and the terms and length of your contract.
Energy tariffs are either fixed or variable. Let’s have a look at the various tariffs available in general below which will help you decide if you need to switch soon.
I. Variable rate tariffs
Variable rate tariffs could be the standard type which is commonly used, the other being tracker tariffs.
A. Standard Variable tariffs
A standard variable tariff is a dynamic tariff that is based on current market conditions and the dictates of your supplier. It allows flexibility such that you could have lower tariffs on certain months while higher on other occasions. You can expect to receive notifications for any pricing fluctuations accordingly.
This being called standard, it means you will be assigned this type as your introductory tariff when you are a new customer, or if you have not provided an option after your contract ends with your existing tariff. Most of us take this for granted because paying energy bills is a routine task. At first glance, SVTs appear as though they are an attractive option but they are deemed expensive compared to other types especially when you consider inflation.
B. Tracker tariffs
A tracker tariff is also a variable plan that is available in some suppliers. The difference from SVT is its transparency because it links to a third party index, which allows a customer to monitor wholesale energy cost with its daily updates. With pricing that can either go high or low based on a clear index, it is still not definitive whether it will bring more savings to the consumer or not.
II. Capped tariffs
A capped energy tariff is another flexible, but not necessarily a cheap option for consumers. As the name suggests, the rate is capped at a certain amount so you will not be charged any higher. You can benefit more from it when it goes lower as dictated by the SVT of your supplier.
III. Prepayment energy tariffs
A prepayment tariff applies to energy consumers that utilise a prepayment meter. Unlike a standard credit meter, you are purchasing credits in the form of a key, token or smartcard which are topped up via mobile app or local stores. This way, you are paying your electricity and gas in advance.
The prepayment meter becomes an option when a customer fails to settle his outstanding bills. He or she can switch back to a credit meter once he is able to pay off his/ her balances. A customer who is a new renter of a flat or someone who just bought a home where the previous occupant left unpaid bills, may be subjected to a prepayment plan as well.
Although not as common, individuals who prefer to stay on top of their budget may opt for this method. Unfortunately, rates for prepayment energy meters run higher than credit meters hence it seems not a practical choice. Meanwhile, the corresponding prepayment tariffs which are set by Ofgem are also updated biannually so you might have to pay using different rates when there are changes.
IV. Fixed price tariffs
A fixed price tariff is the direct opposite of SVT, it locks the tariff rate during a given period, which can last from 1 year to 3 years. This means you are paying a single rate based on kilowatt hour, which will protect you when market rates go up. But needless to say, your electricity and gas bill amount will still be dependent on your usage. This is reckoned to be the most inexpensive tariff rate and therefore a popular option for consumers.
V. Dual fuel tariffs
A dual fuel tariff is having one tariff rate for electricity and gas both supplied by a single company provider. While many people choose to acquire their electricity and gas from different suppliers, having one provider for both can be more cost efficient. This is because of the discount suppliers present to consumers opting to purchase both electricity and gas from them. Also, you will conduct business with just one company that will manage all your energy concerns. Nonetheless, deals from supplier vary which may prompt customers to use two instead of one.
VI. Economy 7 tariffs
An economy 7 energy tariff is tariff for those on the economy 7 meter plan. This meter provides 2 different rates by kilowatt hour to the consumer, one for day use and another for nighttime. The nightly rates are generally cheaper as being considered off-peak for 7 hours, hence the name economy 7.
You have to determine whether this plan suits your usage. You shall be inclined to use electricity from your appliances more at night than during the day to get the most out of it. When you are using an economy 7 plan, your daytime rates are much higher so you have to assess your usage situation before switching to this system.
While you’re at it, check if you may have inherited this energy meter from the former renter or owner of your home. And if it doesn’t work for you, you have to change it immediately.
If you are unsure that you are on this plan, you can refer to your bill, which would reflect two tariffs marked normal and low, and your Meter Access Point Number or MPAN begins with 02.
VII. Economy 10 tariffs
An economy 10 energy tariff is applied to an economy 10 meter plan which is an offshoot of economy 7. You not only have 7 hours of cheaper electricity at night but you also have additional three hours in the day. However, this plan is only available to some providers at this time.
VIII. Green tariffs
A green energy tariff refers to a charge when your electricity usage is matched by your supplier by purchasing renewable sources such hydroelectric stations and wind farms on your behalf. It is currently considered as one of the cheapest given its decreasing energy production costs.
Click on this link which shall provide you comparative tariff pricing based on your electricity usage amount and type of meter. You may also filter results by including your preferred type of tariffs as enumerated above.