Energia has become the first major energy supplier since 2020 to announce a decrease in its energy prices.
Energia customers can breath a slight sigh of relief as the supplier has announced a big decrease in its gas and electricity prices.
The supplier is cutting its standard unit rate of electricity by 15% and its gas unit rate by 20%
Those with smart electricity meters will see a 20% reduction in their rates.
The new rates come into effect from 3 October, just in time for the start of the winter heating season.
Prices still high
As a result of the price decrease, an Energia customer who uses an average amount of energy will save around €350 a year on their electricity bills and €325 a year on their gas bills.
However today's price drop comes on the back of some hefty price increases from Energia over the past two years.
Last October the supplier hiked its electricity prices by over 30% and its gas prices by almost 50%. And before that, in April 2022, it hiked its gas and electricity prices by almost 20%. It also increased its prices several times in 2021.
So even though prices are falling, they’re falling from really high levels to begin with. Meaning it'll still be another expensive winter for customers to heat and light their homes.
Will other suppliers follow?
Today's news comes on the back of a price drop by Pinergy earlier in the week. And it’s highly likely the other main suppliers will announce similar drops over the coming weeks.
But the energy market still remains volatile with gas and electricity prices on wholesale markets still at levels that are way above normal. So there's a limit to how far prices can drop for consumers in the medium term.
There isn't going to be any energy 'price war' and we're a long way from prices returning to the more normal levels we last saw in 2020.
However it does look like there is some light at the end of the tunnel and the worst of the energy crisis seems to have peaked.
The wholesale market has experienced significant volatility over the past two years and we have worked at all times to mitigate the challenges of these costs for our customers. This price reduction is a positive step. Our existing customer supports will remain in place to provide any required assistance to customers experiencing difficulty. We continue to review energy market pricing and are committed to providing customers with the best possible value into the future.
Gary Ryan, Managing Director of Customer Solutions, Energia Group
The Government has committed to keeping the reduced rate of VAT on gas and electricity bills until October. However it will no doubt come under pressure to retain the lower rate for much longer given prices will remain at very high levels for the medium term.
The Government may also pay another round of energy credits this winter - though perhaps at a slightly reduced level.
In the meantime, to help you cope with high energy prices, here are 16 ways to use less electricity and save money.
And if you're struggling to pay your energy bills, here are a range of supports that are available.
Switch and save on your energy
If you’re looking to save money on your energy bills, why not switch to a cheaper supplier?
Even though prices are still high, you can still save money by switching.