Climbing energy prices mean it pays off to shop around for the best deal
With no fewer than 13 suppliers, you would imagine the one market where competition is rife, with providers gagging to reel in customers, is energy.
Yet Irish electricity prices remain stubbornly high (the fourth-most expensive in the EU), while gas, much of which we supply ourselves, is seventh highest.
That’s down to high fixed costs, but also the inertia of customers when it comes to switching supplier. With a raft of increases landing this month across the board, perhaps 2021 will be the ‘Year of the Switch’.
The first April fools were SSE Airtricity, but it was no joke for its 270,000 electricity customers who faced a price hike of 6.2pc. Pinergy also hiked its prices that day by 4.2pc.
Less then a week later, it was the turn of Energia’s electricity (+8.6pc) and gas (+5.7pc) customers and come Monday they’ll be joined by market behemoth Bord Gáis increasing by a hefty 8pc. The smaller players, such as Panda Power, Iberdrola and Flogas, will follow suit.
And in case you’re unsure what those percentages mean, it’s anywhere between €50 and €100 onto the average bill. In a cash-strapped Covid year that could have a serious impact in many households.
If you’ve been filling your car sporadically over the last year you’ll have seen fuel prices plummet and then climb sharply as supply and demand for oil changed as the world economy fluctuated. It’s the same in the energy market since for us, so much is still imported.
Daragh Cassidy of comparison website bonkers.ie adds that transmission and distribution network charges (the cost of maintaining and running the country’s gas and electricity networks) have been increased by the energy regulator in recent months.
“These charges make up around 30pc of the price we pay for our energy and the increases are now unfortunately being passed on to customers too,” he says.
Given the volatility things could get worse, and quickly.
"To make matters worse, the increased carbon tax on gas bills will also kick in from next month, meaning households will now be paying around €80 a year on the tax alone,” he says.
Do you know how many kilowatts of electricity you use? Do you even know what a kilowatt is? Why would you? Most of us haven’t a clue, and get swayed by the ‘averages’ used on websites.
"The average consumption figure really annoys me,” says Brendan Halpin of WeSwitchU.ie.
“The 4,200 kwh electricity and 11,000 units of gas typically used means nothing if you live in an apartment. 70pc of the bill cost goes on usage, so you may as well find out what it is”.
Increases announced by energy suppliers are based on averages but Mr Halpin claims the gap between the cheapest and most expensive dual fuel plans on the market is as much as €2,000 and recommends calling your supplier to get the actual figure to make comparisons real.
"There’s no loyalty in the energy market,” says Mr Halpin. “They only notice when you switch.”
We’re really bad at it, though. Research from the sector’s Commission for Regulation of Utilities (CRU) reveals half of us have never moved supplier. Just one in seven do so in a year, and the majority of them fail to repeat the exercise when their contract is up.
Mr Halpin reckons the inertia is due to lack of understanding of what’s involved. “There’s no new meter, no pipes, nobody calls out, it’s just a phone call. And even then, you can get a better deal with your own supplier”.
His company claims to relieve the householder of this burden. “Once you sign up with WeSwitchU.ie, you do not have to search year-in, year-out for better deals as we continue to pursue savings on an annual basis. When your contract expires, we provide a breakdown of the best deals for your needs and switch providers on your behalf”.
Sometimes phoning your supplier will garner a better tariff, but in some cases they won’t budge until you take the steps to move elsewhere. “Once your supplier knows you’re leaving they start to kick in with retention tariffs.”
Bonkers.ie says if you’re doing it yourself you need to get across the lingo on your bill.
A new supplier only needs the location reference number on your bill (GPRN for gas or MPRN for electricity), an up-to-date meter reading and your bank details.
There is value to be had in gimmicks, also.
Because so much of the cost of energy is fixed, suppliers are prepared to offer discounts for new customers, those locking in for 12 or 24 months, those prepared to pay by direct debit and paperless billing, or level pay (with bills evened out over 12 months).
Some offer gizmos such as Hive or Netatmo gadgets (handy and they save around €250), or straight cash to move. That alone can make it worth the effort, and if it all seems a bit shameless, it is, so why shouldn’t you come out the winner?
You may not have heard of it, but in the next five years your home – along with every house in the country – will have a new ‘smart meter’ installed under a Government plan to upgrade all homes and businesses with digital meters.
The EU-wide program is being rolled out here by ESB Networks under the Climate Action Plan.
So far, around 250,000 meters are already in place, with two million more coming – once Covid permits – over the next four years. Although there’s no upfront charge to customers, the €1.2bn cost will be recouped through electricity bills.
The purpose is to provide real-time information on energy use. This effectively means that estimated bills (which most of us pay under) will become a thing of the past. You’ll only pay for what you actually use.
Suppliers, it is expected, will offer time-based tariff plans on daily use, which means more transparency for consumers.
Early trials showed savings between 3pc and 8pc on bills as users became far more aware of how and when electricity is used in their home.
So, for those who can switch appliances to night time, they can immediately see a saving on their gadget.
For those that make good savings, they can even sell excess energy back to the national grid.
The smart meters can be monitored by the supplier (with your consent), and faults pinpointed much quicker.