Trying to work out which tariff you’re on is bad enough – trying to figure out which tariff you should be on would give anyone a headache.
To make things easier, we’ve laid out how the most common energy tariffs work and weighed up the pros and cons of each, so you don’t have to.
Dual fuel tariffs
Dual fuel means that you use the same energy supplier for both your gas and electricity. This takes out the hassle of dealing with multiple accounts and energy companies, and will also save you money on your energy bills. Because you will be spending more money with them, suppliers offer discounts on dual fuel tariffs which will generally be taken into account on your monthly bill. In some cases they will also offer you a combined bill that covers both gas and electricity.
Switching to a dual fuel tariff isn’t more complicated than normal either. Simply compare dual fuel rates and choose the supplier that’s right for you. The energy switching process is the same – whether you’re staying with one of your current suppliers or switching to a completely new one.
Capped energy tariffs
Capped energy tariffs give you a guarantee that the price of energy per kilowatt will not rise above a certain point for a fixed period of time, regardless of any price rises that your energy supplier may announce.
This may protect you from volatility in the market place and unexpected bills. Bear in mind that capped energy tariffs are usually more expensive than ordinary tariffs, as prices are almost guaranteed to rise during the duration of your contract. There is some good news however, as if energy suppliers decided to cut its standard energy price, then you can benefit from the drop in rates too.
Watch out if you wish to leave a capped energy tariff before the end of your contract however, as many suppliers charge for early exits. To be on the safe side, check with your energy company before you make a switch.
Fixed price tariffs
Like capped tariffs, fixed energy tariffs help you to avoid energy price hikes. Rather than never rising above a certain point, the price of energy remains fixed for the duration of your tariff. Again, energy suppliers tend to be charge above standard gas and electricity rate for this type of tariff, and unlike capped energy, you will not benefit from any price cuts that your supplier decides to make. This can still be a good way to avoid fluctuations in the energy market place, although you may be charged a hefty premium should you decide to exit the contract early.
Online energy tariffs
Online energy tariffs offer consumers discounts on their energy bills in exchange for dealing with bills online instead of through the mail. With this type of tariff, you can manage all aspects of your account through the energy provider’s website, including giving meter readings, paying bills, and reading statements.
The great news is, this doesn’t mean you can’t call your supplier or that you have to pay your bills online. If you’re computer literate, online energy tariffs are a great way of saving money and paper!
Economy 7 tariffs work on different prices for peak and off-peak hours, offering cheaper electricity for 7 hours overnight. This is a great option if you tend to use more electricity in the wee hours, or if you own a night storage heater.
The 7 off peak hours generally fall between 1am and 8am. It is recommended that you use at least 55% of your electricity between these times to make an Economy 7 tariff worth your while, although this will vary dependant on supplier, region and contract. It’s also important to be aware that the price per kilowatt during peak hours may be above standard rates, which means if your daytime consumption increases you could end up losing out.
To switch to an Economy 7 tariff, you’ll need to install a special electricity meter, which reads day and night energy rates separately. Your supplier should be able to do this for you, but may charge an extra fee.
Economy 10 uses the same method of off-peak and on-peak energy rates as Economy 7, but instead of 7 consecutive hours, off-peak times are spread over 2 hours in the afternoon, 3 during the evening and a 5 hour period at night.
Economy 10 tariffs require a meter which is capable of calculating on-peak and off-peak charges separately. Using electricity during off-peak hours can save you up to 50% on standard rates. Be aware that peak time rates can be substantially higher, and with such specific timings on Economy 10, it’s easy to get caught out. Economy 10 is not as common as Economy 7, and in addition to an installation fee, suppliers are often reluctant to offer this tariff to new customers.
Social energy tariffs
Social energy tariffs are for vulnerable customers for whom energy bills count for 10% of their monthly household income. By law, all energy suppliers must provide a social energy tariff that is as cheap as the lowest standard tariff in your area, including deals exclusive to online tariffs.
If you think you might be eligible to join a social energy tariff, contact your energy provider to find out more.
Prepayment tariffs are used exclusively with prepayment meters, which allow the user to pay for their gas and electricity at a standard rate on a unit by unit basis. Payments take the form of either cash inserted into the machine directly; tokens purchased from the energy supplier; or smart cards which you can top up at locations like the Post Office.
Paying upfront for energy on a prepayment meter means no unexpected bills, and can be especially helpful if you struggle to manage your finances. However, prepayment meters are widely regarded as being the most expensive way to receive energy.
If you have are currently on a prepayment meter and have the ability to pay bills rather than upfront, we recommend you compare energy companies to find a better deal. If you’re planning to switch away from a prepayment tariff, you’ll also need to install a new meter, so get in touch with your supplier to arrange an appointment.
Green energy tariffs are becoming more common these days, with most gas and electricity providers offering something with a ‘green’ label. These types of tariffs often work by investing some of the payments you make into developing renewable sources rather than supplying you directly with green energy.
There are a growing number of companies that focus on providing customers with energy from renewables over fossil fuels. To find out more about the different types of green energy tariffs and to understand your supplier’s true green credentials, visit our guide to green energy.
Feed-in tariffs are an attempt by the UK government to reward households that create some or all of their own electricity. This achieved with cash payments for electricity generated through solar panels, wind turbines or hydro power. Unfortunately Energy Switcheroo does not offer comparisons of feed-in tariffs at the moment, but you can find out more about the scheme on the UK government’s website.
Independent Gas Transporter Tariffs (IGT)
Rather than being supplied through the national grid, IGT Tariffs deliver gas to your home through an independent gas transporter. This method of gas supply is surprisingly common, with over a million customers receiving energy this way. Energy companies generally charge a £30 to £50 premium for independent gas transporter services.
To find out whether you are on an Independent Gas Transporter tariff, simply check your meter point reference number. If the number begins in a 74, 75, 76 or 76, your supply comes from an ITG. Comparison of IGT tariffs is not available with Energy Switcheroo, so please speak to your energy supplier to find out more.