How To Find The Perfect Gas And Electricity Tariff

By Elizabeth Summers / July 13, 2017 / No comments
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Finding the perfect tariff is simple, right? Just look for the cheapest deal on a comparison engine and that’s it? Wrong. There is much more to think about when it comes to choosing the right deal for you, and this page is about to show you some of those things. At any given moment, you have hundreds of comparison engines, hundreds of tariffs, hundreds of suppliers, all trying to sell you the same product. But what is behind the product and what separates them from the others? Well, this is divided into five main categories all of which easy to understand and jargon-free. Once you have read through through this, you’ll be ready to save money and keep yourself stress free for as long as possible.

  1. Fixed or variable?

The main thing you need to consider when choosing your new energy tariff is whether you want a fixed or variable unit rate. Unit rate is the cost per kilowatt hour (kWh) of gas or electricity that you use. Basically, this means if you keep a 1 kWh appliance on for one hour, you will pay the agreed ‘unit rate’ value. This amount is prone to change if you are on a variable tariff, as it is affected by wholesale international markets, generation efficiency, time of year, and a selection of other things. Sometimes this can work in your favour, meaning you’ll get a reduction in your unit rate price, and thus pay less for your energy. However, this is rarely the case. Energy prices, like pretty much everything these days, have the tendency to rise, which means if you get the opportunity to lock in an attractive price per kWh for a year or two, it’s advisable to do so.

You do have to be careful when choosing a fixed tariff, however, because through many companies, you will encounter an ‘exit fee’ if you wish to terminate your contract early. This is usually not too drastic of a price, but it is still best to check the exact details of the contract before you rush into a two year deal. It is usually the case that fixed tariffs will be the cheapest option, as the company will want to ensure your custom for a couple of years minimum; however, this is not always the case: at time of writing, in most regions of Great Britain, Bulb’s ‘Vari-Fair’ tariff is the cheapest on the market by quite some distance, which is not only a variable tariff, but it is a 100% renewable tariff also.

  1. Standing charge

For your gas and electricity to actually reach your home, it needs to pass through a series of transmission and distribution networks. These are not owned by the company that you purchase your energy from; they are owned by external private companies and are operational in specific areas of the country. When we say transmission, we mean long distance transportation at high voltage or pressure. When we say distribution, we mean shorter distance and lower voltage or pressure, ready to be delivered to your home. We, as consumers, do not pay these companies directly for their services; however, the energy supplier does. This is what is reflected in the ‘standing charge’, meaning we do technically pay them, but indirectly. Regulations enforced by OFGEM made it so that each energy tariff in Great Britain must have a standing charge, which worked towards making a more transparent cost structure; however, some suppliers are trying to work that to their favour by offering a 0p standing charge.

0p standing charges are technically still legal; however, it is a very sly move from the supplier. To counterbalance this, they increase the unit rate considerably and market it as being a ‘no standing charge contract”. In the standard household, this will almost always work out as being more expensive for the consumer; however, it can sometimes work in your favour: If you have a second home or a holiday home that is seldom occupied, this could be a fantastic way of avoiding paying standing charges when you are using zero electricity most of the year.

Transmission and distribution is also one of the reasons why we see a different price quotation for each region of the UK. Depending on where you live, the static charges imposed on your supplier will be different due to the corresponding distribution companies. As such you’ll probably find pretty sizeable differences between Eon prices in Birmingham , for example, and those of Dundee.

  1. Renewable or standard

Most energy suppliers are now offering 100% renewable electricity tariffs that reduce the demand for non-green electricity on the grid by your full usage amount. This is fantastic for the environment and is a great step towards reducing the production of non-green electricity and funding alternative energy generation methods. If this is one of your priorities, then this is something that you will definitely want to consider when looking for your ideal tariff. All-green tariffs can often be a little bit more expensive than the average standard tariff; however, like we saw earlier, Bulb’s ‘Vari-Fair’ tariff definitely does not fit into this category. There are also companies such as EDF Energy that are not focusing on offering one all-green tariff, but reducing the carbon impact of all tariff offers.

  1. Gas and electricity with different companies?

You may notice when you look round comparison sites that some companies have really cheap electricity but not gas and visa versa. You may also realise that if you add one of each together and signed up for the two separately, it would be much cheaper than having a dual fuel contract with the same company. Although this is the case from time to time, it is not always as simple as you’d like it to be. Here are a couple of reasons against it:

  • You won’t be with them for life, meaning twice the work when you switch
  • Two different customer services to handle
  • Potentially two different billing cycles and methods
  • Many companies offer discounts when you have dual fuel
  • Potentially two different end dates, meaning confusion and chaos when switching

That said, it is possible. It all depends on how dedicated you are to being organised and saving as much money as possible. Just don’t rush into two separate contracts without knowing the ins and outs. Do also look into any potential dual fuel discounts each company could offer you, because it may turn out that it makes up the difference.

Customer Service

Not all companies are the same when it comes to their customer service capabilities. Often we group all companies into one category of ‘being a nightmare’ without any thought. To be fair, you’re probably well within your rights to do so, as much of the customer service industry is appallingly bad; however, the exceptions are definitely out there and it is definitely worth doing your research  into which suppliers these are before diving into two years of endless unresolved issues. All companies are prone to billing errors from time to time, but you should be looking for the company that is going to sort it out the quickest with the least amount of stress. Having a well versed customer service department to deal with can also be of great help when you plan to switch at the end of the contract as well, as otherwise, you may be in for an interesting experience.