×
Sundaybusinesspost

Put all your energies into saving money

Households are paying hundreds of euro a year for heating and electricity, so understanding the energy market and getting the best tariff have never been so important.

Energy companies say that gas and electricity bills rise in line with a host of external factors, such as prices in the wholesale energy markets, international events and currency fluctuations. Making predictions on future energy prices is difficult, given the continued volatility in many of these pricing elements.

Many households already spend more than €1,000 annually on energy, which represents a huge chunk of a typical family's budget. According to Electric Ireland, the average annual household electricity bill is €1,040, with the average annual gas bill coming in at €847, both figures excluding value added tax (Vat).

Bord Gáis said that average annual gas bills were €961.53, while electricity cost €1,149.81 annually, including Vat. Airtricity's average bill for electricity is €1,127 and €888 for gas, including Vat.

With an array of energy tariffs on the market, consumers might find it difficult to assess whether they are paying over the odds for their gas and electricity. Comparison website Bonkers.ie, the first energy price comparison service to receive accreditation from the energy regulator, allows consumers to compare various tariffs via an interactive comparison tool. The comparison website has to adhere to a strict code of conduct to retain its approval from the regulator, so comparisons, data and figures are checked to ensure accuracy.

Who offers what?

Traditionally, you got your gas from Bord Gáis and your electricity from the ESB. The market has changed a lot though, with significant deregulation and a number of new entrants. Electric Ireland, ESB's supply business, no longer has a monopoly in the electricity market, with Airtricity and Bord Gáis also offering electricity. Similarly, Bord Gáis faces competition in the gas market from Airtricity, Flogas and Electric Ireland.

So can anyone switch?

In theory, yes. But if you sign up for an annual contract, you could face a switching penalty if a better deal comes along during your contract. A Bord Gáis spokeswoman said it did not penalise switchers, while Electric Ireland's spokeswoman said a €50 fee applied to cover administration costs. With Airtricity, a €25 fee applies "per fuel per year of the contract", according to a spokesman.

How much energy do I use?

Most consumers would probably be hard-put to estimate how much energy they used in the past year. But having this information makes it easier to get an accurate picture of how much you can save by switching. Take a reading from your meter and ask your energy supplier for comparable figures from one year earlier to work out your annual energy usage. This makes it easier to determine what tariff is right for you and your usage habits.

Aside from switching, what else can I do to cut my bills?

There are two things to consider here: the way you use energy and the way you pay for it.

On energy usage, it's important to know your habits, what your saving goal is and what you are prepared to sacrifice. For example, you might be prepared to turn down the heating a notch if it means continuing to have a nice, long power-shower in the mornings. The key to saving money on energy consumption is figuring out what guzzles energy. So get used to unplugging equipment, turning things off and being generally more energy-efficient. It's a case of forming new habits.

When it comes to paying your bill, utility firms will usually give you a discount if you opt to pay by direct debit or for online billing. Some providers offer bundled tariffs for customers who have their gas and electricity supplied by the same company, and these are worth looking at too.

How much can I save?

This depends on your starting point. If you have already pared your energy use right back, and are active in the switching market, you probably have less scope for further reductions than an energy guzzler who has never switched. According to figures from Bonkers.ie, energy customers who have never switched provider could save about €250 a year, based on the tariffs currently available.

How can I budget for big bills?

Being prepared is half the battle, so make sure you do account for energy costs in your weekly, monthly and annual budget.

Energy bills will generally be much higher in winter, but if you prefer a consistent cost, energy providers will allow you to spread your bills evenly throughout the year. This option gives you greater control over your budget, removing the potential for shocks with bi-monthly bills. About 2 per cent of Electric Ireland's customers use its Equaliser plan with 12 equal payments annually, while around 25,000 customers are availing of Airtricity's Budget Plan option to smooth their payments. Bord Gáis also offers a similar plan, called Level Pay, with a spokeswoman saying uptake had been "strong".

Are any special deals available now?

It's worth keeping an eye on the market, as new plans frequently become available. Existing plans can also be tweaked or discounts added, so keep abreast of what's on offer to get the best value.

For example, Electric Ireland recently launched a plan that offers a 10 per cent discount off standard gas and electricity prices to former customers who switch back.
.........................

Five tipsfor lower energy bills

Simon Moynihan, energy expert with comparison website Bonkers.ie, shares his top five tips for reducing the size of your energy bills.

Switching to a new supplier or a better deal is the quickest and simplest way to save money on home energy bills

Although only two out of five households have switched, it's still worthwhile. Households with gas and electricity that have never switched can reduce annual bills by as much as €254, or more than €20 per month, by switching to the cheapest deals.

Beware of expiring discounts

Suppliers generally offer discounts for one year only. Then customers are moved to more expensive standard rates. If you've been with your current supplier for more than a year, you're probably paying more than you need to, so it's a good idea to check energy prices annually. Some suppliers will give you another discount if you ask, otherwise you can switch again.

Watch out for long contracts and penalties

Suppliers are increasingly asking new customers to agree to contracts of up to two years, with penalties of up to €100 for leaving before the term is up. As prices change and new deals come on the market with increasing frequency, it's probably best to sign up for one year at most.

Read your own meter

Your meter is read four times a year, but only if the reader can get to it. Depending on the supplier, estimated readings can vary substantially from actual usage. Submit a meter reading yourself whenever you receive your bill to ensure you pay only for what you use. Your money is better off in your pocket than earning interest in your supplier's bank account.

Invest in an electricity monitor

Electricity monitors cost less than €40, and are available online and through most electrical retailers. They are simple to set up and can tell you in real time how much electricity your home is using. They can also be programmed to tell you the cost.
.........................

People In Focus: the energy business

A Galway-based start-up that manufactures and installs multi-zone heating control systems can help homeowners and businesses save money on their heating bills.

Radeco Energy Solutions was set up two years ago by brothers Eoghan, Ciaran and Brendan Considine, and businessman Mick O'Toole. It has also developed a network of 20 installers around the country.

Radeco's technology allows users to control the temperature and timing of heat in each room in their home or commercial building, reducing energy wastage and ultimately cutting costs. Eoghan Considine said the system treated each room as an "individual heating zone".

While there is an initial installation cost for the technology, which varies depending on the size of a property and the number of radiators, Considine said the investment would typically pay for itself in two to three years, thanks to the reductions in heating bills.

The firm estimates that its technology could save users more than 30 per cent of every €1,000 spent on their heating bill. Considine said savings would depend on current usage and bills.

Radeco's technology can be controlled remotely, either online or via a smartphone app. "It gives users complete control over their heat consumption and how they heat their home," he said.

"For example, if you get soaked in the rain on your way home, you can turn on the heat before you get home. If you are stuck working late, you can delay the time the heat comes on by an hour by pushing a button on your smartphone."

By using this website, you agree to be bound by our Terms of Use and consent to the use of cookies in accordance with our Cookie Policy.