Energy tariffs are the way in which energy companies charge their customers for their gas and electricity usage. There are various types for customers to choose from and each supplier offer their own unique tariffs. With so many options and suppliers to choose from, picking the right tariff can be confusing!
Which energy tariff should I choose?
Energy suppliers offer a range of different tariffs with different features, prices and contract lengths. The most common tariffs include:
- Variable tariffs - The most common form of tariff with regularly changing prices
- Fixed tariffs - Ideal if you prefer to pay a fixed amount per month
- Economy 7 tariffs - Designed to you save money if you mainly use energy at night
- Dual-Fuel tariffs - Save money by receiving both gas and electricity from the same supplier
- Online tariffs - Special tariffs requiring web-based account management
- Prepaid tariffs - If you have a prepaid meter in your home
- Green tariffs - If you are keen to use renewable energy
- Feed-in tariffs - To earn money from the solar panels on your property
Standard Variable Tariffs
Standard variable tariffs are the most popular tariffs and are the default tariff offered by most electricity and gas suppliers.
- Standard variable tariff prices rise and fall in line with the electricity and gas market
- There are no contracts or early exit fees with standard tariffs
- Standard variable tariffs include few constraints, such as online account management
Fixed-price tariffs come with fixed unit prices (the amount you pay per kilowatt hour of energy you use) for a set period of time - typically between 1 to 3 years.
- Fixed-price tariffs guarantee you pay a set amount per unit of energy
- They often work out cheaper than other tariffs as you are protected from price rises
- However, you could lose out when wholesale energy prices drop
- The amount you pay per unit of energy is fixed, but your bills will vary each month based on usage
- These tariffs require entering into a contract with an energy supplier
- You may have to pay an "early exit fee" if you switch supplier before your contract ends
Economy 7 Tariffs
Economy 7 tariffs only apply to electricity customers with meters that distinguish between daytime and nighttime electricity consumption. Like Standard tariffs, Economy 7 tariffs:
- Have variable prices depending on electricity market changes
- Do not involve contracts or impose early exit fees on customers
- Are flexible insofar as most payment and management options are available
Dual-fuel tariffs are designed for customers to receive both their gas and electricity from the same supplier.
- They are popular because of the ease and convenience of dealing with one supplier
- Dual-fuel tariffs can come with either variable or fixed prices
- Suppliers typically offer a discount for receiving both your fuels from them
Online Energy Tariffs
Online energy tariffs involve energy suppliers offering a discount for customers who accept to manage their account online:
- Online energy tariffs are convenient for people who are happy to manage bills and submit meter reading online.
- Online energy tariffs may be offered on both variable and fixed pricing plans, for single or dual-fuel customers.
- Online energy tariffs are not convenient for people who like receiving paper bills and dislike interacting with customer services over the Internet.
Prepaid Energy Tariffs
Prepaid energy tariffs are only for customers with a prepaid meter installed in their home.
- Prepaid energy tariffs are attractive to customers who want to manage their energy bills in advance
- They tend to be slightly more expensive than standard or fixed-rate tariffs
- They are available with either variable or fixed pricing plans, for single or dual-fuel customers
Green Energy Tariffs
- Green tariffs typically include 100% renewably-sourced electricity and 10% green gas
- They can be either fixed or variable, depending on the supplier
- They are becoming increasingly cheaper than non-green alternatives
Feed-in tariffs are for customers with solar panels installed on their property. Customers can join a feed-in tariff in order to be paid for the solar-powered electricity they produce, by selling any surplus electricity back to their supplier.