What’s going on in ye olde energy market?
All the top cheap deals were whipped off the market recently, all comparison sites have a reduced selection of cheap deals and energy firms such as Bulb who are greatly esteemed, put their prices up twice this year already?
There’s been a few things going on:
Wholesale prices are at an all time high in the last 3 years and up by 50% compared to last year so all energy firms who buy their supplies from companies such as NPower are having to pay more. Other countries were in the same position with more of us being at home so we’ve all been using more domestic power pushing up pricing.
For a lot of energy suppliers who offer cheap deals they are sailing very close to the wind when it comes to their profit margins so when customers move on after their first year to find another cheap deal, they’re left relying on those who haven’t changed supplier on a higher rate to keep them going.
You will have seen more than 20 energy firms going out of business since January 2020. Simplicity Energy, Green Network Energy, Yorkshire / Daisy Energy, Green Star & Tonik were all taken over since last Autumn alone. As above, energy companies have to get it really right in the customer service arena mixed with consistent fair pricing to keep customers loyal to them.
There was a lot of “bad debt” created from non payment of bills in the last year so suppliers are looking to recoup this.
The Ofgem price cap* increased April 1st to pre-pandemic levels as a result mostly of the wholesale price increases - these are likely to increase again come October meaning that for a lot of households this will add around £100 a year to their bill.
Standard tariffs are also known as out of contract or variable and whilst they don’t have early termination fees are rarely the best value. Oddly enough there are some that are better right now if you're prepared to take the risk & wait it out until late Summer before fixing your prices for Winter.
We are buying more hot tubs & electric patio heaters so we can enjoy our British summer such as it is so far, plus working from home has increased our usage. Hot tubs seating around 4 people used three times a week can add £20-£30 a month to your energy bills! Without a holiday to look forward to this is a drop in the ocean but just be aware.
Electricity prices are partly linked to gas prices because we use gas to generate some of our electricity. Some nuclear power stations were offline for maintenance earlier this year & it was less windy in the same period to last year meaning wind turbines lost some of their productivity.
Bulb, Octopus Energy (including Affect Energy, Co-operative Energy, Ebico, M&S Energy and London Power) and Pure Planet have all announced price increases to their standard tariffs recently, there will be more to come over the summer to prepare for the Autumn & Winter so don't overly delay in securing a good fixed price.
Don't forget if you are renting, providing you are paying the bill to the supplier directly you are entitled to change your supplier. If you are on a prepayment meter and would prefer a credit meter speak with your landlord first. Your supplier can ensure you are on a smart credit meter which can be turned into a credit meter. More on these in another post.
Young people especially don't really understand their bills so often get into a pickle, underpaying, overpaying or not paying!
If your young family member is off to uni, renting or buying for the first time it would be great for you to explain how this all works.
Our First Time Buyers Guide would be a good gift
Most energy firms bill monthly direct debits and send you a quarterly summary via email or post, others like UW will send you a monthly statement which means that you can keep a regular track on spend.
A smart meter is highly recommended, more on this in another post, but in short these are new generation meters that have a display you can use in your kitchen for example to keep an eye on how much you're using. The display is just that, the smart meters are still doing their thing if the display is turned off or shoved in a cupboard like mine.
On your bill, "A" next to the kwh units stands for actual meter readings. If the readings are estimated it will say "E" next to the reading. If you are taking your own meter readings and uploading these through your app or calling them in, it might show "C" for customer reading.
Estimating is normally a decent enough assumption based on your anticipated useage when you became a customer but of course, accuracy is best.
If you haven't got a smart meter, it's a good idea to get one installed by your supplier for free. Double check your landlord doesn't mind out of courtesy if you're renting.
If you don't want or can't get a smart meter it's best to set a calendar alert for you to complete a reading ever month so you stay up to date.
I'll do a beginners guide to everything soon.
Do you have any objections to me reviewing your bills to see how much I can save you?
Depending on how much you like to chat we can look at it all from 20 minutes up to an hour. You tell me what you need & I'll show you how we can sort that out.
List of the various resources for my information correct as of july 7th 2021