10 important terms to know when switching energy supplier
Feeling daunted by the energy switching process? Well don't be. Here's a simple explanation of the common terms you might encounter so you can switch with ease.
Keeping on top of your finances is important, and at bonkers.ie we’re always here to help. One of the easiest ways to save money on your household bills is by switching your energy supplier every 12 months to make sure you’re always on the most cost-effective energy tariff.
However, if it’s been a while since your last time switching you might be confused by some of the terminology and jargon that appears, but there’s no reason to be.
Below is a list of energy terms we’ve explained to help guide you through the switching process.
1. Early exit fee
An early exit fee is a charge that's applied if you leave your supplier before the end of your contract.
An energy contract normally lasts for 12 months in Ireland, unless stated otherwise, and the exit fee charged is usually €50 per fuel.
By law all suppliers must provide a 14-day cooling-off period, during which time you cannot be charged an early exit fee if you change your mind. If you do decide to leave while still in contract, we would advise not to switch unless you can recoup your loss with the discount gained on your new tariff.
2. Cashback offers
Some suppliers offer a cashback incentive when signing up to certain energy tariffs. It’s important to point out that the cashback value advertised is usually deducted from your first energy bill. It’s never credited to your bank account, nor do you receive a cheque or cash in the post.
When comparing energy prices using our energy comparison tool on bonkers.ie you will have the option of including cashback incentives in your results. You can do so by selecting 'yes' or 'no' at the bottom of the comparison page.
When looking at cashback deals try not to get blindsided by the amount of offer. It’s usually best to focus on the overall estimated cost of your energy over the entire year.
3. Standing charge
A standing charge is a fixed charge added to all gas and electricity bills to cover the upkeep of the network which brings the supply of gas and electricity to your home. It's a fixed charge so it doesn't change regardless of the amount of energy you use. The standing charge also goes towards the costs associated with servicing user accounts, carrying out meter readings, and issuing and processing bills.
The standing charges for gas and electricity are separate and will vary from supplier to supplier, and from tariff to tariff. A slightly higher standing charge applies where a second electricity meter is installed for NightSaver and storage heater tariffs. Standing charges also differ for urban and rural customers (see more on that below).
The charge will appear on your energy bill in cents per day, excluding VAT.
4. Electricity supply region
Your electricity supply region can be either ‘rural’ or ‘urban’. When switching electricity supplier we need to know your supply region so we can give you the most accurate comparison results. This is because rural standing charges are higher than urban standing charges due to the additional costs of maintaining supply to rural customers.
When telling us your supply region don't presume you're in one or the other. Rural and urban areas are assigned by the ESB network according to your MPRN. For example, you might presume you're an urban customer because you're living in a 'built-up area', however, this may not always be the case.
If you are unsure about your electricity supply region make sure to double check your energy bill where this information is clearly visible.
5. Estimated Annual Bill
Your Estimated Annual Bill (EAB) is an estimate of what you will be charged for an entire year's energy consumption. It is generated using the estimated annual consumption figures for gas and electricity, provided by the Commission for Regulation of Utilities (CRU), in kWh.
Your EAB will take into account the relevant charges applied to your bill, including the annual standing charge, carbon tax or the PSO levy where applicable, as well as VAT. It will also take into consideration any discounts applied such as cashback incentives.
The estimated annual consumption figures for gas and electricity are currently 11,000kWh and 4,200kWh respectively according to the CRU and are the best estimates of the amount of energy you will use in any given year.
6. Fuel mix
The fuel mix is the ratio of the fuels and energy sources used by a particular supplier in the generation of the electricity supplied to you. It is calculated as a percentage out of 100 and is usually made up of varying percentages of fossil fuels such as coal, gas, peat, as well as renewable energy sources.
You can see each supplier’s complete fuel mix on bonkers.ie when comparing energy deals.
A kilowatt-hour, or kWh, is the unit of measurement used to describe how much energy is consumed by using gas and electricity. For example, one kWh is the amount of energy consumed if you keep a 1,000 watt or 1kWh appliance running for one hour.
The kWh is most importantly used as a measurement to calculate household energy bills. Gas and electricity unit rates will be charged per kWh and can be seen on bonkers.ie when comparing energy deals.
8. New customers only
You are considered a new customer if you haven’t subscribed to a supplier’s service for at least 12 months, in other words, for the duration of a standard contract.
The majority of discounted energy deals are advertised for ‘new customers only’ because they are only available to people who aren't already existing customers of the energy supplier.
9. NightSaver meter
A NightSaver meter records your electricity consumption for day time and night time separately, and allows customers to avail of electricity at a reduced price at night. Night time is from 11pm to 8am during winter time and 12am to 9am during summer time.
With a NightSaver meter your day time rate will be slightly higher than the usual standard rate and customers can expect to pay around 10% more. However, the night time rate is around 40% cheaper. This means a NightSaver meter works really well for those who use a lot of electricity at night, so if you can't change your schedule to make use of the cheaper might time rate then it's best not to have one installed.
10. Standard & fixed unit rates
A unit rate is the cost of electricity or gas per unit of energy used. This figure will be displayed on your bill, along with the other taxes and levies that make it up, which include VAT, the PSO levy, and carbon tax. Unit rates vary from supplier to supplier.
The standard unit rate is the price charged by a supplier without any discount applied. This is why it’s important to always look for the best deal when your contract expires, as most suppliers will move you to their standard rate which will generally be more expensive. It's seldom to get an extension of a discount once your contract expires.
A fixed unit rate means the amount you pay per unit of energy used will not change for the length of your contract. If energy prices decline, being stuck on a fixed unit rate could mean paying more for your energy, however, on the flip side, fixed rates can help to protect households from energy price increases.