Nobody wants to pay over the odds for their gas and electricity bills. When choosing an energy supplier often price and customer service are the most important thing on our minds.
Whether a supplier uses renewable energy or not is often high on our list of priorities when we are comparing gas and electricity suppliers. However, environmentally-conscious consumers want to know that they are doing their bit for the planet while they are saving money. Other than following energy saving tips or using energy saving gadgets, switching energy supplier is one of the best ways to save money on your energy bills.
However, with so many renewable energy suppliers available, it's difficult to compare energy prices and the process can be time-consuming. So, to help you we have created the ultimate guide to the cheapest renewable energy suppliers on the market.
Is Renewable Energy More Expensive?
Renewable energy is often thought of as coming at a premium. It has the reputation of being much more expensive than the normal fossil fuel derived fuels, so called, “brown” or “dirty” energy.
However, this belief is mostly based on outdated information which has no bearing on the current energy market in 2018.
While we may not be there quite yet, recent trends seem to indicate that we are on our way to making renewable energy as cheap as, if not cheaper than, fossil fuels.
“Just one thing...would be enough to halt climate change. If clean energy became cheaper than coal, gas or oil, fossil fuel would simply stay in the ground.”
In fact, recently the prices of generating renewable energy have fallen dramatically, leading many to believe that very shortly it will surpass brown energy to become the cheapest kind of energy available. Recent statistics show that the cost of generating wind energy has fallen 23% since 2010 and the cost of generating solar energy has reduced by 73%.
Onshore wind schemes now cost an average of between 0.03p and 0.05p per kWh, cheaper than fossil fuels which are coming in at between 0.05p and 0.13p per KwH. As you can see in the graph below, worldwide the cost of renewables is now becoming as or more competitive than the price of fossil fuel generated power.
This is in no small part due to government investment in green infrastructure and subsidies.
Also, the number of electricity suppliers who specialise in green energy has been growing exponentially in the last few years and many of these companies are investing in and supporting renewable energy projects all over the UK. Not only are they environmentally friendly but they also have some of the cheapest electricity prices on the whole market.
Companies such as Tonik Energy and Ecotricity are introducing new technology such as solar panels, batteries and electric vehicle chargers and encouraging businesses to generate and sell their own renewable energy.
The goal is that by 2020 renewables will actually be cheaper than brown energy. Renewable energy auctions, where people buy and sell electricity, are a good indicator of future energy prices. At the moment, they seem to indicate that renewable energy will only continue to drop in price and that there is a real possibility of this goal becoming a reality.
The World Wildlife Foundation (WWF) has indicated that 2017 was the UK’s greenest year ever and the UK broke 13 renewable energy records such as passing 1000 hours without using coal. Additionally, more UK electricity was produced by wind and solar sources last year than by nuclear power stations, for the first time according to the latest government figures. Renewable energy’s share of electricity generation increased to 29%, while nuclear sources only accounted for around 21%.
What’s more, celebrities such as David Attenborough are getting behind projects such as the Global Apollo Programme which will help fund research to lower the price of green energy even further.
The celebs join scientists, politicians and energy experts who are working hard to convince people that a sensible approach to climate change can provide economic benefits as well as environmental ones.
Attenborough, in an interview with The Guardian, stated that “Just one thing...would be enough to halt climate change. If clean energy became cheaper than coal, gas or oil, fossil fuel would simply stay in the ground.”
So, although we may not think green equals cheap; it looks like perhaps the future really will be green in the UK.
Who are the Cheapest Renewable Energy Suppliers on the Market?
Here at TheSwitch, we love green suppliers but we also love that people can do their bit for the planet without having to break the bank.
To find the best deals on the market we took a look at all of the green suppliers in the UK at the moment (there are currently more than 20!) and reduced our list down to the 7 cheapest energy providers.
Here’s a little bit of information about our top contenders for the coveted prize of cheapest renewable energy supplier 2018:
Pure Planet Energy is a brand new energy company to enter the UK energy market. They use 100% renewable energy and 100% carbon offset gas. They are an app-only supplier and have a 0% markup on wholesale energy prices.
Solarplicity is one of the bigger suppliers of renewable energy in the UK. They use only 100% renewable energy from biofuels, hydropower, wind and solar. Solarplicity have a variety of social projects to help end fuel poverty and to promote the use of solar panels.
So Energy is a 100% green independent energy supplier which began operating in the UK in 2015. They aim to be simple, honest and good value and have recently won awards for customer service.
Bulb Energy is a startup based in London and aims to provide green energy that won’t break the bank. All of its electricity comes from renewable sources with 100% of its electricity and 10% of its gas coming from independent green energy generators in the UK.
How to find out which is the Cheapest Energy Supplier
With so many different energy companies on the market and so many different deals to choose from, if you aren’t clued up about energy then finding a cheap energy supplier might seem like a minefield.
Tariff Comparison Rate (TCR)
We have compared suppliers using the tariff comparison rate or TCR. This is the fairest way to compare the energy costs of electricity providers because it puts all of the players on an level playing field.
The TCR is a number which shows how much a tariff will cost for a typical customer. It works a little bit like the APR on credit cards by assuming the average energy usage, standing charges and discounts and then represents what this actually means for the customer either in pence per kWh or pounds per year.
It can be used as a clear and easy way to compare tariffs and is the easiest way to find the best energy deal..
To figure out if one tariff is cheaper than another you can compare the TCR of one company to another.
You should always be able to find the TCR for your company on your bills, annual statements or letters from your supplier. The company which has the lowest of the two numbers will be the cheapest supplier.
Many customers turn to comparison websites to work out which is the cheapest supplier. Although they can find you some cheap deals they sometimes aren’t completely honest with consumers.
Energy comparison websites often work by getting commission from the different suppliers. This means that they often won’t give you details on every deal on the market or help you really find the cheapest electricity price - only the ones which give them the most commission.
This becomes even more complicated when you are trying to compare only green energy suppliers as there is currently no online comparison site which deals exclusively with green energy.
We want customers to not only find a cheap deal for their energy supply, but to also feel confident that they are helping protect the planet and making ethical choices. One recommended site which compares the whole market is Selectra.
Who are the Cheapest Renewable Energy Suppliers with the Cheapest Fixed Tariffs
The first kind of tariffs that we compared were fixed tariffs which are usually the cheapest deals that you can get on the energy market.
In fact, there are many misconceptions about what a fixed tariff actually is. Many customers believe that because they are on a fixed tariff their bill will be the same every month. However, this is not the case. A fixed rate doesn’t mean it’s an all you can eat buffet. Your bill will increase or decrease depending on your energy use. Sadly you don’t have free reign to use as much electricity as you want.
The advantages of a fixed tariff are that you know your energy prices per kilowatt hour and your standing charges are going to stay the same for the period of your contract. Remember, this DOES NOT mean that your bills will stay the same every month as your energy usage will change from month to month.
Historically, the disadvantage of a fixed tariff was that you were “trapped” in the tariff for the period of your contract by “exit fees.”
Exit fees mean that to leave your contract you would have to pay a penalty - typically about £30 to £50. While the biggest six energy suppliers E.ON, British Gas, SSE, Npower, Scottish Power and EDF still have exit fees on the majority of their fixed tariffs, newer small suppliers like those on our list have ditched the exit fees.
This is good news for customers as it means that it's easier to switch suppliers if you can find a better deal. It is also a sign of good faith from the suppliers as they are committing to try to keep their customers with good customer service and cheap prices.
However, not all the suppliers on our list have fixed price tariffs. In fact, Bulb Energy and Outfox the Market are variable-only suppliers, so we have no data for them.
The Cheapest Renewable Energy Supplier with the best Fixed Tariff Prices
As you can see the cheapest fixed tariffs for dual fuel customers belong to Tonik, Octopus Energy and So Energy. We looked specifically at Tonik’s Positively Greenest v7 Tariff, Octopus Energy’s 12 Month Exclusive Fixed and So Energy’s Llama tariff.
Comparison: Quotes for a Family of Four in London
To give you an idea of what these tariffs would look like for real customers, we did a quote for a family of four, living in a three-bedroom house in London and paying with monthly direct debit.
As you can see from looking at the TCRs individually, Tonik has the cheapest rates. Taking into account the discounts, Tonik just beats Octopus Energy to the post with a difference of £55.88 per year.
- Positively Greenest v7
- Gas + electric
- £76 per month
- £901 per year
2nd Octopus Energy
- 12 Month Exclusive
- Gas + electric
- £79.74 per month
- £956.88 per year
3rd So Energy
- Llama tariff
- Gas + electric
- £117 per month
- £1407 per year
Who is the Cheapest Energy Supplier for Customers on a Fixed Tariff?
Tonik Energy, Octopus Energy and So Energy have fantastic customer service reviews and so it is really difficult to choose between the three companies.
In this case, it would be easy just to go with the cheapest option Tonik Energy as their reputation as a fantastic supplier precedes them.
We would recommend that you take some time to check out our article on the renewable energy companies with the best customer service in 2018, where both Tonik and So Energy feature as two of the companies who treat their customers well.
No matter which of these companies you choose, you can be sure that you will not only get fantastically low prices but good customer service and 100% green energy too.
The Renewable Energy Supplier with the Cheapest Variable Tariffs
We’ve talked a bit about the benefits and disadvantages of fixed tariffs, but what about variable tariffs? In the past, variable tariffs were almost always thought of as the most expensive types of tariffs.
In fact, many customers ended up on a very specific type of tariff called a standard variable tariff after their fixed tariff ended. This left customers shocked by how much they ended up paying for their bills.
Nowadays though, the energy landscape is changing and there are some advantages to being on a variable tariff.
Many new suppliers such as Outfox the Market claim to not make any profit at all on the price of wholesale energy and save money for customers that way. Of course, this means that they make their money on the standing charges or “membership fees,” as they call them, but many customers are finding that their prices are rock bottom and can save hundreds of pounds compared the bigger suppliers.
The wholesale prices of energy change frequently. Source: Octopus Energy
The disadvantage is of course that energy prices change constantly and so you could have an increase in your bills when you least expect them. Energy prices do go up and down but as a general rule, they are almost always increasing in price.
Most companies will give you warning, normally about a month before the prices go up and of course, you can switch supplier whenever you want as there are no exit fees associated with variable tariffs.
Who are the Cheapest Energy Suppliers for Customers on a Variable Tariffs?
The results for variable tariffs are unsurprisingly quite different. The results are dominated by the companies who specialise in variable tariffs. We looked at the Pure Planet Variable Tariff, Bulb Energy’s Varifare Tariff and Octopus Energy’s Flexible Tariff.
Again we did the calculations for our typical family in London to let you see a relative comparison between the companies.
1st Pure Planet
- 100% Green
- Gas + electric
- £71.94 per month
- £863 per year
2nd Bulb Energy
- Gas + electric
- £73.00 per month
- £876.00 per year
3rd Octopus Energy
- Flexible Octopus
- Gas + electric
- £78.90 per month
- £946.80 per year
As you can see, with the dual fuel discount added it works out that Pure Planet is the cheapest supplier for variable tariffs but there isn’t too much difference between the top three suppliers in terms of price.
Who is the Cheapest Energy Supplier for Customers on a Variable Tariff?
All of the companies in the top three have fantastic low prices. However, customer service may have some bearing on your decision. Customers should be aware that Pure Planet is, as of yet, a relatively little-known supplier and they are online only. This means that they don’t have a customer service phone number.
If price is the bottom line and you are completely sure you want to be on a variable tariff then you could try your luck with Pure Planet. However, we would suggest that our second and third place winners have much higher customer service ratings and if given a choice we would recommend paying just a little more to get excellent customer care.
Which is the Cheapest Renewable Energy Supplier Overall?
The cheapest renewable energy supplier will, of course, be different for every customer and depend on your usage, the area in which you live and how many people you live with.
However, taking all factors into account we would say that the best deal on renewable energy is Tonik’s Positively Greenest v7 tariff. It has no exit fees which means you can leave whenever you like and has generally fantastic customer reviews.