Switching energy - when are cashback offers good value?

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 €250. The question is, do these offers save you money in the long run?

Bord Gáis Energy, Electric Ireland, and SSE Airtricity are all offering cash or account credit to new customers who choose to switch. As it’s high summer, energy bills are a low priority for most of us, but it’s worth noting that now is actually a great time to switch suppliers. Take a load off your mind before the big winter bills start rolling in, just be sure to consider the full cost of a price plan over the course of its contract before signing up for any offers.

Which suppliers are offering cashback?

Bord Gáis Energy is offering a €75 cashback, along with a 14% electricity discount and 8% gas discount to new dual fuel customers. By switching to Bord Gáis Energy’s dual fuel deal, customers on standard rates with average consumption will save €226 when you add in the cashback.

Electric Ireland is offering €175 cashback and a 5.5% discount to new gas or electricity customers, as well as €175 cashback and an 8.5% discount for dual fuel customers. So for example, if you switch to Electric Ireland for gas, against standard rates you'll save around €228 on gas alone when you include the cashback.

Finally, SSE Airtricity is offering €200 credit – the largest amount we’ve ever seen here at bonkers.ie – and a 10% discount to new dual fuel customers. This could result in a saving of €318 (with cashback included) for customers on standard rates with average consumption.

How to get the maximum cashback deal on offer

By switching your gas to Electric Ireland and your electricity to Bord Gáis, you’ll get €175 and €75 cashback, respectively. So, €250 in total.

With the discounts associated with those price plans factored in, making this move could save a household on standard rates with average consumption €376 in year one.

When are cashback offers good value?

The lure of cashback offers are 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 get your gas from Electric Ireland and electricity from Bord Gáis and avail of the cashback offers; you’ll save €376 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 €318 in year one as compared to standard rates if you switch to Energia for electricity and Flogas for gas.

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 suppliers with the best cashback offers (Electric Ireland and Bord Gáis) you would save €460 on gas and electricity in year one.

However, if you were to switch to the current cheapest discount rates available (electricity from Energia and gas from Flogas) you would save a more substantial €532 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 €72 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 gas and electricity rates from Energia and Flogas respectively, you would save around €226 in year one.

However, if you look for the best cashback deals you’ll see that Electric Ireland is offering a saving of €39 plus cashback of €175 which adds up to a total of €214 on gas alone.

Bord Gáis will give you €51 in savings plus €75 in cashback which is a total of €126 on electricity alone.

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 €340 in year one if you go for the best cashback offers which is €114 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 Energy Regulation takes the view that cashback amounts should not be included in comparison calculations. Here at bonkers.ie, we care about showing you a complete and transparent breakdown of how each provider structures its price plans and since cashback offers are unrelated to consumption levels we think it's best to keep them separate from calculations too.   

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.


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