My first flat had a prepayment meter. It took 50p coins and had a big padlock on it. When my landlord came around on Fridays to collect the rent (cash only), he opened the meter and took the few quid there too. When I didn’t have any money and the power shut off, there was nothing I could do about it… although I did waste quite a bit of time picking away at that damn padlock with a paperclip.
Prepayment meters were a scourge back then. Even if you had a wad of old Irish folding money, you could arrive home on a dark evening without a 50p coin in your pocket and find yourself brushing your teeth by candlelight.
Prepay energy's modern makeover
Prepayment meters have come a long way since my dark days in Dublin bedsits. They now have have snazzy digital displays, they’ll tell you how much electricity you’re using, how much credit you have left, and most importantly, they won’t cut you off at night or on weekends. In fact, they are often referred to as pay-as-you-go meters. And they can even be topped up like a mobile phone. In fact you can top them up with your mobile phone if you want to.
The complete makeover of the humble prepayment meter has been quite something to behold and people are now genuinely interested in them as a way to manage their budgets. Until recently, the only way to get one was to fall seriously behind on your bills, but now there are two companies operating in Ireland that will install prepayment electricity meters free of charge for customers that want them as an alternative to the standard credit meters.
The two companies are PrePayPower and Pinergy, and between them they have managed to sign up thousands of customers over the last couple of years by packaging their prepayment meters as a service that puts YOU in control.
There’s a whole new narrative around prepayment meters that goes like this... Prepay electricity is now proactive and smart. No more shocking or unmanageable electricity bills. Pay for your power as you use it and control your costs and your budget. You can even use a prepayment meter to control your usage and start saving money too.
There is no doubt that there are a range of benefits to prepayment electricity meters. At bonkers.ie we frequently hear from customers that really struggle with their energy bills, especially the big winter ones that come in after Christmas. And not knowing how big those bills are going to be can be a real worry. So the question then is, are voluntary prepayment meters a good budgeting solution?
Certainly they are for many people. Pinergy and PrePayPower woudn’t have signed up thousands of customers if they weren’t. But it is a pricey way to get your electricity. That’s because both companies track the Electric Ireland Standard rate which is Ireland’s most expensive electricity plan. Then they add on their own Prepayment Service Charge of 37.5 cent per day which adds up to an additional €136.71 per year that their customers need to pay.
When you put the Prepayment Service Charge together with the regular standing charge and the Public Service Obligation Levy, it means that prepayment electricity customers are paying around 80 cent per day before they use any electricity at all. And that 80 cent will just keep clocking down the credit on the meter whether any electricity is used or not.
Both companies are clear and up front about their pricing and the Prepayment Service Charge is fair enough. They need to pay for the meters, the payment network and make some money too. But can the additional control and usage information that a prepayment meter provides help you save money on your bills by reducing consumption?
Well, let’s take a look some costs first. Below are a few deals that give an idea what an eligible average household might spend in a year across all electricity companies.*
€1,049 – Airtricity Home Electricity Saver
€1,051 – Bord Gais 10% Discounted Electricity
€1,077 – Electric Ireland ValueSaver – their cheapest deal
€1,179 – Electric Ireland Standard Rate - tracked by PrePayPower and Pinergy
€1,316 – Pinergy
€1,316 – PrePayPower
So the difference between pre-paying for your electricity or paying by direct debit on a discounted deal can be as much as €267 per year. It means that a prepay household could be paying a premium of a fiver a week or €22 per month.
Both companies say that having a prepayment meter should help customers reduce their consumption, and we have no reason to doubt these claims. But just how much would Pinergy or PrePayPower customers have to reduce their consumption by to overcome the Prepayment Service Charge and bring them in line with the Electric Ireland Standard rate that both companies track? Well, quite a bit actually. They’d need to reduce electricity consumption by 708 units a year which is nearly 13.5%.
Now 13.5% is a lot, but it’s probably doable. Electricity Monitor companies like Owl have been saying for years that being more aware of your electricity usage will help to reduce consumption, and the prepayment meters from Pinergy and PrePayPower both have electricity monitors built in. But is a reduction as large as 13.5% likely? Pinergy reckons that it is. They actually go one step further and suggest that savings of 19.5% could be possible based on a international Smart Meter study. If you really could get your consumption down by 19.5%, you'd actually beat the cost of of Electric Ireland's Standard rate by €62.
But what about the discount tariffs that are available from Airtricity, Bord Gais and Electric Ireland? How much would a prepayment customer need to reduce consumption by to match one of those? Well, to match Airtricity’s Home Electricity Saver deal, a prepayment customer would need to reduce electricity usage by 1,383 units a year, which is 26%
To reduce electricity consumption by 26% would require monumental effort. It would be like turning absolutely everything off and going Victorian for three months of the year. Doable? I dunno about that.
*These plans are not available to everyone. There are a range of eligibility criteria that customers must meet to sign up to most discount plans. These include previous customer status, account standing, payment method and billing requirements.
**Price comparisons are done using national average household electricity consumption of 5,300 kWh per year.