Energy price cuts given a warm welcome
News that energy bills will fall by around £75 a year for 11 million households has been given a warm welcome by a green energy expert.
Ron Fox was commenting on the energy watchdog Ofgem’s announcement last week to cut the price cap by 6 per cent to help those on poor-value deals.
Also, a further 4 million, who have pre-payment meters, will see a reduction of £25 or 2 per cent.
The regulator, which updates the levels of caps in April and October each year, said the reductions were due to lower prices in wholesale energy markets, a significant drop in costs and relatively healthy storage levels.
It will mean that the level of the price cap for default and standard variable tariffs (SVTs), which protects around 11 million customers, will fall to £1,179 annually on average from October 1 and the price cap for around four million pre-payment meter customers will drop to around £1,217 a year at the same time.
However, the cap is on the unit price of energy and the standing charge, so savings depend on how much energy is used and how the bill is paid.
But Ron, of Noreus Ltd on the University of Keele Science Innovation Park, stressed households would still better off by switching away from default tariffs and SVTs as fixed rate deals of around £900 a year were still available.
“I would encourage all customers to shop around now to get themselves the best deal possible for their energy and it is so simple. he said.
Before logging on to a price comparison website, make sure you have your postcode, the name of your current supplier and the name of your current tariff. You can find your tariff and supplier details 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.
He said there were also a number of new automatic switching companies which promise to switch regularly customers to the cheapest deal on the market.
The price cap for pre-payment customers was introduced in April 2017 on the orders of the Competition and Markets Authority, which found that they were getting a particularly poor deal.
The wider cap on all default tariffs was introduced earlier this year by the Government. They concluded that inefficiency and excess profits by large energy suppliers meant that householders, particularly loyal and poorer customers on standard tariffs who didn’t shop around, were paying too much.
“However,” Ron added, “there is one way to stop getting nasty surprises from energy companies and that is to swap to green energy using free sunlight.
“People can also make longer-term savings by improving the energy efficiency of their homes. Simple steps, such as better insulation or heating controls, are a good place to start.”
For more information on green energy and efficiency schemes contact Ron on 0845 474 6641.