You’re probably using less energy than you were last year. As a nation, we’re all using just a little bit less electricity than we were, and we’re using less gas too.
Using less isn’t just an Irish phenomenon though, it’s a worldwide one. Our neighbours in the UK have been using less electricity every year since 2008 and it’s the same in Spain and many other countries across Europe. They’re even using less in the USA.
In fact, the UK and the USA are both down about 2% since 2008. It doesn’t sound like much, but when you consider growing populations, more building and more gadgets than ever, this drop in consumption starts to look pretty significant.
There are many reasons why we’re gradually reducing energy consumption. We’ve become much more aware of the energy we’re using, we’re turning stuff off when we don’t need it and of course our appliances and devices are much more efficient than they used to be.
Sure, we all know about new light bulbs, but even a new appliance like the humble fridge will use just half as much power as one made 15 years ago - and many of the other household gadgets boast similar power savings.
But money talks loudest and the most significant driver of reduced consumption is cost. We have less money now than we did just a few years ago, and energy is more expensive than ever - so we’re all making an effort to use less.
Demand Destruction
This gradual reduction in energy consumption is of great concern to the energy industry worldwide, and what you mightn’t know is that they’ve even given it a name. They call it “demand destruction” and it’s ordinary households across Ireland and around the world that are at the front line of this destruction.
Armies of people are “destroying” demand by exchanging guzzling gadgets for efficient ones. A and B rated washers and dryers are making their way into our homes as we replace our old appliances. Most of us already have low energy bulbs, our homes are warmer and better insulated, and some of us are even making own hot water now too.
All of these things are leading to a slow but steady decline in household gas and electricity consumption. This is a good thing for many reasons, but sadly it hasn’t led to lower bills for most of us. That’s because the price of gas and electricity has increased so much over the last few years that being careful and efficient does not even come close to offsetting those price increases.
In fact, we now pay over 20% more for our electricity and 35% more for our gas than we did just three years ago. It would be a monumental challenge for any household to reduce consumption by that amount.
Top rates
So of course we should keep up the effort to use less, but we also need to look elsewhere to try and offset these huge price increases. Now we all know that switching for a better deal is a good way to lower energy costs, and around 25,000 electricity customers and 8,000 gas customers do just that every month. It sound like a lot - and it is – sort of.
The thing is though, when you do the sums these numbers don’t look so great anymore. They actually show that less than 20% of Irish households are on discounted deals at any one time – and the rest of us are paying top rates. That’s because discounts expire after a year and customers are moved back on to those expensive standard rates. And then there’s all the households who’ve never changed supplier or tariff.
A good time for a change?
Last month Ireland became fully deregulated for gas and electricity. It’s a pretty big deal because it means that the Energy Regulator can no longer sets prices for Bord Gáis or any other energy supplier.
And once Bord Gáis was deregulated, the company quickly introduced a discounted gas and electricity deal which knocks 10% off their unit prices. It’s not just Bord Gáis though. Earlier this year Energia entered the residential market and began selling discounted gas and electricity to households as well as businesses, and of course, Airtricity and Electric Ireland and Flogas all offer very good value discounted deals too. So, in a nutshell, there are now a range of providers to choose from and you can get discounts from all of them.
It means that switching is simply the quickest and most effective way to reduce household energy bills. Moving from standard prices to the best discount deals can save 15% which is like getting nearly two months electricity and gas for free. It won’t offset the huge price increases we’ve seen over the last few years, but it’ll certainly put a dent in them – and you may even be able to break even with your reduced consumption.
What’s the catch?
Well, if you change supplier, you’ll usually need to stay for a year to get most discount offers. You’ll usually be asked to pay by direct debit and get bills online too. The best of them could reduce bills for an average household by more than €320 a year though (which is a saving of over €25 a month), but the energy companies don’t just hand them out, you need to sign up – and that’s the catch. And the reason suppliers offer these deals is that they are looking for your business and hope you’ll stay after the discounts run out.
As they say, competition is great, but you need to take part if you want to win.
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When is a good time to think about changing suppliers?
Some experts recommend changing suppliers or tariffs during the Winter when the big bills come in. It’s a great time for prompting people into action, but in reality any time is a good time to think about changing. That’s because most discounted energy deals have contracts of one year, so if you switch now you’ll save for the coming Autumn, Winter and Spring. Just make sure that you are not in contract with your current supplier before changing.
If you haven’t switched before, what’s involved?
If you want the best deals, you’ll usually need to pay by direct debit. Suppliers save money by taking payment this way so they are able to pass some of these savings on. Additional discounts are generally available for customers that get their bills online rather than in the post, so it’s worth switching to online billing too.
Actually changing suppliers can be done online or over the phone. You’ll need to complete a brief application, but the only things you’ll need are your direct debit information for billing and your MPRN and your GPRN – these numbers can be found on the first page of your electricity and gas bills. You’ll need recent meter readings too – but you can take these yourself on the day you switch to ensure accuracy.
The whole process takes around two weeks to complete, but you’ll actually be billed on your new rates from the meter readings your provide – so as soon as you complete your application you’ll effectively be on your new rates with your new supplier.
The best thing is that there’s no interruption to your supply and nobody needs to visit your home – you just get cheaper gas and electricity.
Tip
You may not have to switch supplier to get a better deal. If your account is in good standing, your current supplier may be able to give you a better rate. These deals are generally known as “retention tariffs” and you have to ask for them, but if you don’t want to switch supplier, this can be a good way to save money.
And finally, discounted energy deals usually last for just one year and then the discounts expire. If you want to keep saving, you’ll need to check for the best deals once a year. But with savings of over €320 now available to an average household, why would you want to keep paying standard rates? It won’t offset the price increases of the last few years, but it will certainly help put a dent in them.
