The energy market is competitive with many of Ireland’s energy suppliers offering substantial sums of cash and account credit to customers who switch. Right now, customers who switch strategically could pocket up to €200. The question is, do these offers save you money in the long run?
Which suppliers are offering cashback?
Electric Ireland is offering €200 cashback and an 8.5% discount for dual fuel customers. So for example, new customers switching to Electric Ireland, against standard rates will save around €375 with their cashback included.
SSE Airtricity is also offering €200 credit as well as a 10% discount to new dual fuel customers. This could result in a saving of €291 (with cashback included) for customers on standard rates with average consumption.
Panda Power offers €120 cashback along with a 12% discount for new dual fuel customers. Combined with the cashback voucher, switching to Panda Power results in a saving of €253 for customers on standard rates with average consumption.
When are cashback offers good value?
The lure of cashback offers is appealing and of course, they’re designed to be. The question is, are these cashback offers really good value when you compare them to actual rates? The answer lies in your own personal usage patterns.
Let’s compare the best discount rates with the best cashback offers currently available.
So, as we saw above, if you go for Electric Ireland's dual fuel offer above you’ll save €375 in year one as compared to standard rates.
If you, on the other hand, forgo the cashback offers and choose your suppliers based on the best discount rates currently available, you’ll make a saving of €289 in year one as compared to standard rates if you switch to Energia's dual fuel offer.
If you take the numbers at face value, it looks like the cashback offers are delivering the better deal, but in reality, the best deal for you depends on how close your usage habits come to the national average.
Cheapest rates win for high consumption households
If, for example, you live in a large house with a busy family using a lot of energy on a daily basis throughout the year, you might find that cheaper rates will outweigh the benefits of tempting cashback offers. Let’s illustrate how with an example:
Let’s say your household uses an annual average of 7,000 kWh of electricity and 18,000 kWh of gas (the national average rates of energy consumption are 4,200 kWh and 11,000 kWh respectively) so you’re well above standard levels of usage.
If you switched to the supplier with the best cashback offers (Electric Ireland) you would save €490 on gas and electricity in year one.
However, if you were to switch to the current cheapest discount rates available (dual fuel from Energia) you would save a more substantial €530 over the course of year one.
So, as you can see, if you use a relatively high amount of energy (7,000 kWh of electricity and 18,000 kWh of gas) you would be €40 better off by opting for the lowest rates as opposed to the highest cashback amount on offer.
Cashback wins for low-consumption households
On the other hand, if you live in a low consumption household (for instance a one-bedroom apartment or a small cottage) and don’t use a lot of gas and electricity, you might be better off opting for whichever deals offer the largest cashback amount. How? Let’s take a look at an example:
Let’s say you use 3,000 kWh (1,200 kWh below the national average) of electricity in a year and 7,000 kWh of gas (3,000 kWh below the national average). By switching to the current cheapest dual fuel supplier for this consumption band, in this case, Just Energy, you would save around €233 in year one.
However, if you look for the best cashback deals you’ll see that Electric Ireland is offering a saving of €118 plus cashback of €200 which adds up to a total of €318.
So as you can see, if you’re in a low consumption household like the one in this example, you could save a total of €318 in year one, if you go for the best cashback offers which is €85 more in savings than if you simply opted for the cheapest rates.
Why doesn’t bonkers.ie include cashback in bill estimates?
The Commission for Regulation of Utilities (the regulating body for bonkers.ie) takes the view that cashback amounts should not be included in comparison calculations.
As always, the best way to find the right price plans for you is to visit our Gas & Electricity Comparison page and take a look at all of the options available to you.