Keeping the cost of heating a home down

It is an expensive business to keep an Irish home warm over the winter – writes Simon Moynihan

Aside from the spiralling cost of fuel and heating, we pay the fourth-highest electricity prices in Europe. It's only the sky-high energy taxes in countries such as Denmark and Germany that keep us from the very top of the list.

Our climb to super-high energy bills has been short and quite brutal. Irish householders saw electricity prices climb by almost 20pc between 2010 and early 2014.

While we're shaking our heads at record energy bills, it's been quite puzzling to hear that oil and wholesale gas prices have hit record lows over the last few months.

By late last month, wholesale gas prices were 25pc lower than they were last year. The price of a barrel of oil was down by a massive 45pc. When you consider that gas is used to generate nearly half of our electricity, you'd think that households should see their bills come down too.

After all, when suppliers had to pay more, they passed those extra costs on to us. Shouldn't they pass their falling costs on to us too?

Sure, there haven't been any major price increases this year, and Electric Ireland did cut electricity prices by a couple of per cent a few months ago. However, for the most part, standard prices have remained unchanged since last year, despite those falling wholesale prices.

So why aren't the suppliers cutting us a break? Well, they are - for the ones that are prepared to take action.

Since the summer, suppliers have been offering the biggest discounts we've seen since deregulation. In some cases they are offering discounts of up to 20pc off standard rates to get new customers. But that's just it, the deals are available to new customers only.

Suppliers have even thrown in cash-back offers, reward programs and free gizmos like the Nest and Climote heating controllers to get you signed up and keep you there. But almost all of the lower-cost gas and electricity deals require customers to either switch from their suppliers or contact their supplier and ask for a better deal.

It may seem like a merry dance, but it's worth it. An average household can save nearly €300 a year by changing from standard gas and electricity rates to cheaper discount deals. That's €25 a month that can be spent on much better things. Sure, it won't offset all of the recent price hikes, but it should certainly make a decent dent.

Unless there's a price increase, the most common time to change supplier for a better energy deal is in the months after Christmas. That's when the really big winter bills come in, and they spur us into action.

However, we use most of our energy in the dark months between October and March so by the time we get our first big winter bills, we've already paid top rates for most of the winter.

So if you're on standard rates, or it's been more than a year since you checked energy prices, you will save by changing supplier or tariff now. Any time is good, but sooner is nearly always better.

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