Can you still save by switching energy supplier? - Cork’s 96FM
Despite the Government’s efforts to get a handle on the energy crisis by providing households with a one-off electricity credit, consumers are still facing price hikes from suppliers in the coming months.
These price hikes are due to a combination of inflation, the skyrocketing price of gas on wholesale markets and the ongoing Russia-Ukraine crisis.
CEO of bonkers.ie, David Kerr, appeared on Cork’s 96FM to discuss what’s currently happening in the energy market.
Listen back to the interview above or take a look at the main points discussed by David in the interview below.
Is switching energy supplier worthwhile?
Yes, switching energy supplier is still worthwhile, despite prices increasing.
If you have signed up for a discounted energy deal in the past 12 months, what you’re agreeing to is a percentage discount against that supplier’s standard rate.
For example, you might have signed up for a deal with 20% off, which you’re still getting even if standard rate prices increase. You and the supplier are both still within the contract.
If you switch energy supplier, you’re not wasting time. If you’re on a discounted deal for 12 months, you’re saving money, whereas if you’re on the standard rate, you’re paying the most expensive rates available.
Is it possible to get a fixed rate on your energy deal?
We’ve had fixed unit rate tariffs in the past with a number of suppliers.
A fixed-rate tariff means that the unit rate you pay cannot change for the duration of your contract, which usually lasts a year. The fixed rates we did have available went away right before the Covid-19 pandemic and haven’t returned to the Irish market.
What we do have are discounted variable rate tariffs, which are offered by all suppliers.
Suppliers have a number of different levers they can pull, it’s not just the unit rate they can change.
Bord Gáis Energy’s price hike
Bord Gáis Energy (BGE) announced a hefty price hike last week. Not only is BGE increasing the standard unit rate, but the supplier is also increasing the standing charge for both gas and electricity.
Bord Gáis Energy put a price pledge in place last October, which meant that they wouldn’t increase prices over the Christmas period. BGE held on as long as it could but has announced that it's increasing the unit price of its gas by 43% and the price of its electricity by 29%.
The daily standing charge will increase by similar amounts for gas and electricity customers. These changes will come into effect from April 15th.
The standing charge is a set daily rate that your supplier charges associated with providing electricity and gas network services. It’s meant to have the upkeep of the network in mind.
Both the unit rate and standing charge are variable and can change, so that’s why we calculate everything together on bonkers.ie.
What else is taken into account when calculating energy costs?
As well as the unit rate and standing charge per day, your level of consumption is also taken into consideration.
Along with this, the PSO levy is also added to electricity. Similarly, the carbon tax is also added to gas bills. The carbon tax will actually be increasing in 6 weeks' time. This won’t be reduced, as it’s a climate change measure.
We also have VAT, which is added on at 13.5%. There are many taxes on your energy bill. You can learn more about how the Government adds to our energy bills in this blog.
Your gas bill, for example, is made of 4 components:
- The amount of gas consumed
- The standing charge per day
- The carbon tax
- VAT at 13.5%
The €200 one-off cashback credit will be in your next billing cycle. On your bill, this will show up as a credit of €177, plus VAT, which adds up to €200 altogether.
Your meter reading and switching
People tend to think that they change their energy provider at a specific point in time, or a particular date, however it actually has more to do with a point in consumption.
When switching energy suppliers, your meter reading is important for your new supplier and they need to know it.
For example, if your old supplier bills you up to 1,000 units on your meter, then your new supplier will start to bill you from 1,000 units on your meter.
Those looking to switch should provide their new supplier with their current meter reading. You can easily take a meter reading yourself, which you can learn about in this guide.
If you have a smart meter, this will automatically provide the meter reading.
Will energy prices continue to increase?
We expect that the future will be a bit bumpy for energy customers and that there will be numerous price hikes announced by suppliers in the coming weeks and months.
In 2021 there were 35 energy price hikes by all suppliers and this year there will be more, unfortunately.
Switch energy supplier to save
To offset these inevitable price hikes, why not consider switching to save?
Here at bonkers.ie, our energy comparison service makes it easy to compare prices and deals from Ireland’s main gas and electricity suppliers. Once you find the best deal for you, you can switch online and save hundreds on your annual energy bills.
Discover all you need to know about the energy comparison and switching process in this guide.