Cheaper energy bills as cost of gas and electricity falls
Good news is in the pipeline for millions of householders this autumn after the wholesale price of gas and electricity has fallen dramatically this year.
Around 11 million consumers will save on average £84 a year in total in October on their energy bills after the industry regular Ofgem cut the default price cap to £1,042, its lowest level since the cap was introduced in January 2019. Another four million will also gain as the pre-payment meter cap will fall by an average of £95 to £1,070.
“With all the bad news around it is great to comment on some good news for residents,” said Midlands green energy expert Ron Fox. “It will be very timely for those who will see lower bills at the same time as the colder weather arrives.
“It will also help those who are struggling to pay their bills because of the economic effects of Covid-19.”
Ron said the default price cap was designed to protect consumers who are overpaying for their energy and don’t switch providers, as well as encouraging suppliers to become more efficient and to pass on the savings.
But he pointed that savings depend on how much energy is used in the household and how the bill is paid. The cap is on the standing charge and per unit of energy, not on the total bill. So people who use more energy will still pay more than those who use less.
A dramatic fall in demand for energy worldwide this year has seen wholesale prices slashed.
Although more people are using gas and electricity at home in the lockdown it is nowhere near the fall in the demand for industrial needs with grounded flights and dormant offices and factories.
But Ron warned that the cap was likely to rise in April 2021 when Ofgem next reviews the figures, as wholesale gas prices have started to recover since hitting 20-year lows in the spring.
He said now was a good time to look at two further ways to save money on their bills. “Firstly, people can make longer-term savings by improving the energy efficiency of their homes, such as by putting in better insulation or heating controls. Secondly, they could shop around for a better deal and swap suppliers as around 6.4 million households did last year.”
He added that it was easy to switch supplier. Before logging on to a price comparison website, have your postcode, the name of your current supplier and your current tariff, which can be found on a recent energy bill.
“The site will suggest the cheapest supplier and if the companies are happy, they can organise the switch online and it should be completed within weeks with no interruption to supply,” added Ron, of Noreus Ltd on the University of Keele Science and Innovation Park.
For more information about better home insulation and green energy call Ron on 0845 474 6641.