PRICE FREEZE
Don’t wait for Ministers to impose a cap. If energy costs rise you can cool your bills as autumn approaches
THINKING about heating and energy bills may feel odd during the warm summer months but savvy households should act now ahead of price rises this autumn.
This month, British Gas – which earlier this year bragged of its winter price freeze – became the last of the Big Six energy providers to announce hikes. The average dual-fuel bill for a standard tariff with the firm is set to rise by 7.3 per cent from September 15.
Mark Todd, of comparison website Energyhelpline, says: ‘The British Gas price freeze has melted in the summer sunshine with prices going up £76 a year on average from the middle of next month. If you are one of the unlucky ones, you need to switch.’
The price rise has prompted an independent review – due to report in October – into how the Government can meet climate change targets while keeping costs down for households. But do not wait until then in the hope of an official price cap. Here are five ways to start your own price freeze and curb gas and electricity bills.
1 SWITCH ENERGY PROVIDER
MORE than one in four households fails to hunt for the best energy deal. This is despite the significant savings to be made by a simple switch. According to credit checking firm Experian nearly half of bill payers feel it is too much effort, while 41 per cent fear disruption. But such apathy simply lines the suppliers’ pockets.
From next month, customers on a standard tariff with British Gas face an average annual bill of £1,120 – when they could pay less than £850 a year if they moved to a cheaper tariff. Stephen Murray, at comparison website MoneySupermarket, says: ‘Summer is a time when many people take their eye off energy bills, but British Gas customers will feel it when big winter bills come through and they are paying hundreds more than those who moved away.’
It is not just British Gas customers who need to take note. Anyone approaching the end of a cheap fixed-rate energy deal with any provider, should act now. Those who stay put will be moved on to their supplier’s expensive standard rates.
Murray adds: ‘Eighteen popular tariffs end in August. If you do not take action and secure another fixed rate before your end date, your bills could rise by almost £200 a year.’
Switching is straightforward. There is no break in supply and no engineers are involved. Ben Wilson, from comparison website Gocompare, says: ‘Switching is free unless your existing tariff has a cancellation charge or exit fee. You usually only find these on fixed-rate tariffs, and you do not have to pay a fee if you switch within 42 days of your existing tariff coming to an end.’
Websites such as Gocompare, MoneySupermarket and Energyhelpline can help you find a better deal.
2 BE MORE ENERGY-EFFICIENT
THERE are many ways to reduce the energy you use, most of which require little effort, according to the Energy Saving Trust:
ONLY boil as much water as you need in the kettle to save £7 a year.
SWAP old inefficient light bulbs for modern LED ones (costing up to £10) and save £35 a year.
DRY clothes outside – rather than in a tumble drier – to save £30 a year.
INSTALL draught-proofing on windows and doors to save £25 a year. A professional may charge £200, but you will pay a fraction of that if you apply your DIY skills.
Other forms of insulation are more costly, but can pay off in the long term. If you do not already have it, loft insulation costs £300 to install in a three-bedroom semi-detached house, and could save £135 a year.
Cavity wall insulation costs £480 for a typical three-bedroom semi, and could save £150 a year.
‘A-rated’ double glazing in a single-glazed home will cost about £4,000 for a three-bedroom semi, and might save £75 a year.
If you are struggling to heat your home, it is worth checking whether you are eligible for any Government support to install energy-saving measures. Call the Energy Saving Advice Service on 0300 123 1234.
3 INSTALL A SMART METER
THE Government wants every home to have a smart meter by 2020. Installation is paid for by your energy supplier and bills should be more precise and let householders monitor energy usage more easily and adapt their behaviour in response. Estimates suggest they can save £15 a year on electricity and £10 on gas.
But the initiative has been plagued by controversy. Todd says: ‘The rollout has been mismanaged with the Government forcing suppliers to
spend billions on smart meters that go “dumb” when customers switch supplier. The cost of building and maintaining the IT infrastructure to support the meters is far higher than estimated. In the end it will be the consumer paying the price.’
There are other devices that help households save money. Nest and Hive offer ‘smart heating controls’ to let you see what the temperature is in your home and control your heating from afar on a phone app.
The Nest Learning Thermostat (which costs £279, including installation), learns household habits and can adapt to weather conditions, so heats a home cost-effectively. Nest says this can shave 16 per cent off energy bills. Other such devices include Tado and Heat Genius.
Francesca Hayden-Sims reckons she saves £120 a year by controlling her heating through her Nest thermostat. The 31-year-old operations manager for Canon lives in a four-bedroom house in Brentwood, Essex, with her husband, Dario, 41, and their two dogs. With Nest, Francesca can turn on the central heating from her mobile. She says: ‘This makes my life easier. I can adjust the heating when I am at work or on the way home from a night out, so I am never left in the cold. I can even operate it when I am away on holiday. As the device is linked to my home’s lighting, I can also switch lights on and off remotely.’
Francesca gets a monthly report on her energy-saving efforts.
4 KEEP YOUR BOILER IN TIP-TOP FORM
MANY households switch to a ‘smart’ thermostat when they replace an old boiler with a modern ‘combi’ version, as the additional cost may be just £60.
If you have no plans to replace your boiler, ensure it still has an annual service, so it operates safely and efficiently. You should allow £100 for this. Ben Wilson at Gocompare says: ‘A well-maintained boiler costs less to run, so you recoup some of the cost – plus a repair is often expensive.’
By law, landlords must have a tenant’s boiler checked at least once a year. Late summer is a good time, as plumbers are less busy and you can ensure there are no problems before cold weather kicks in.
Use a Gas Safe registered engineer – see Gassaferegister.co.uk.
Wilson adds: ‘You can buy specialist home emergency cover from firms such as Homeserve – as well as the energy companies themselves. Premiums range from £2 to £20 a month, depending on the level cover you want. The newer the boiler, the cheaper the premium.’
But check your home insurance policy first. One in five include some form of home emergency cover as standard and others offer it as a cheap add-on.
Wilson says: ‘You might be able to call on it in the case of a boiler breakdown.’
You might be better off putting aside money each month to cover the cost of a potential breakdown.
5 PICK RENEWABLE ENERGY
JOINING the renewable energy revolution does not come cheap but may save a fortune in the long run.
Costs should fall as the Government intends to make it easier for households to generate power.
Many people already generate their own electricity. Domestic users benefit from feed-in tariffs which pay for energy exported to the National Grid, so they may end up in credit on an electricity bill.
Roof-mounted solar panels often do not need planning permission, unless you live in a listed building or conservation area.
Panel and installation costs have nearly halved in recent years to between £5,000 and £8,000 in total for a system expected to last 25 years, according to Which?
But the feed-in tariff has also fallen fast since it was introduced in 2010. Install solar panels now on an average home, and it would take 21 years to recoup the cost, with a profit of £650 after 25 years. What happens when the sun does not shine? Doug Clayton from solar installer UK Solar Generation, says. ‘A solar photovoltaic system will generate electricity on a cloudy day but is obviously most effective on a bright sunny day. The energy can be stored in a battery during the day, further reducing your bills when the sun has gone in.’
Products such as Tesla’s Powerwall, which stores surplus electricity, are becoming available for ordinary consumers and the Government has just announced plans to invest £426million in battery technology. It says this could save consumers £40billion by 2050.
Ikea is about to start selling battery storage in addition to solar panels. Visit ikea.co.uk/solar.
The same technology can be used to store electricity from wind turbines. A big drawback is turbines can cost upwards of £20,000. Check with your local authority if you need planning permission.