Take the heat off your energy bills by switching suppliers every year
Changing your supplier is still the easiest route to cheaper gas and electricity - but you need to do it every year to reap the full benefit
It's become a common refrain that when one domestic electricity or gas supplier raises its prices, nearly all the rest can be almost guaranteed to follow suit within a matter of days or weeks.
The latest ball started rolling in early June, when SSE Airtricity announced that prices would rise. By mid-July it had been followed by Electric Ireland Flogas, Energia, Pinergy, Panda Power, Bord Gais and Prepay Power.
In fact, the only exceptions at the time of writing are the newest entrants, BE Energy and Just Energy.
So consumers could be forgiven for wondering if some kind of price cartel is being run somewhere along the energy industry supply chain.
"The speed with which energy suppliers have all increased prices around the same time does suggest a herd-like mentality, but whether that amounts to a cartel type of behaviour is obviously more difficult to prove," said Daragh Cassidy of price-comparison site Bonkers.ie.
But the energy regulator, in its recently published annual review of the market, insists the market is competitive, with 10 electricity suppliers and eight gas suppliers, compared with five and four respectively in 2013. In addition, it points to the fact that Electric Ireland's market share has dropped below 50pc for the first time ever.
Eoin Clarke of rival price comparison site, Switcher.ie, said: "The price we pay for our energy is made up of a number of factors, with one of the main components being the cost of wholesale energy. So, while it's true that we tend to see the majority of suppliers implement price increases or decreases at the same time, it is evident that this follows the overall trend in wholesale prices."
Cassidy believes competition is keeping a downward pressure on prices in the market, but "as the wholesale price of energy has increased so much recently, it's been almost impossible for the suppliers not to pass some of it onto consumers".
But he also points to the disparity in the price increases, which differ quite widely from supplier to supplier.
In electricity, Pinergy raised prices by nearly 9.38pc while Energia added on 7.6pc, but Bord Gais only hiked prices by 5.8pc. In gas, SSE, Energia and Flogas all jacked their prices up by just over 12pc, while Bord Gais added 4.7pc to the cost of its tariffs.
So if you are a dual fuel customer, you may end up paying up to €180 more a year as a result.
Needless to say, switching is the easiest route to savings, particularly if you have been with your supplier for more than a year.
Introductory rates generally last for 12 months, after which your supplier will switch you back to the standard tariff and you'll end up paying far more for your service.
"So if you remember to switch suppliers every year, you'll ensure that you're always on a discounted rate, so you'll always get the very best value for your money," said Cassidy.
Customers who switched their electricity provider every year for the last four years would be better off to the tune of €1,146, according to the Commission for the Regulator of Utilities (CRU). Gas switchers would have saved €670 over the four-year period.
Those with both electricity and gas, who have been active switchers, would be €1,417 better off, according to the calculations by the energy regulator.
The CRU also insists that switching rates in Ireland for both electricity (14pc) and gas (18pc) in 2017 compare well with other EU countries.
This is backed by a report last year from the Council of European Energy Regulators, which shows that Portugal had the highest switching rates in 2016 for both electricity and gas at just over 20pc, while quite a few countries ranked at below 1pc, including Luxembourg, Poland, Romania and Bulgaria. The report classes anything over 10pc as a high switching rate.
"There's no indication as to why switching rates are higher in some countries when compared to others," said Clarke. "However we have seen in Ireland that new entrants and new tariff offerings can shake things up, so this could be a factor."
One interesting footnote to the CRU report is that it found low levels of "repeat switching", with data showing that of those who switched electricity in the last year, 65pc of electricity switchers and 50pc of gas switches defaulted to a standard tariff.
So while lots of us switch, most of us don't switch every year like we should to get the maximum savings.
"Our research also shows that fear factors - like not wanting to get tied into a contract, not being able to tell if a new supplier would save them money, and thinking that switching seemed like too much hassle - can all put consumers off switching," said Clarke. "In reality, switching is very straightforward - it only takes a few minutes, and could save consumers hundreds of euro each year."
It helps that switching is very simple and quick, once you have a recent bill to hand. Using CRU-accredited price comparison services like Bonkers.ie or Switcher.ie, you'll be asked how much energy you typically use, which you can calculate using your bill.
To make the switch, you will need an up-to-date meter reading; this is straightforward, but instructions are online if you're unsure how to do it.
If you switch to a new supplier, they will typically sign you up to a 12-month contract, and will charge a fee if you break it. This fee is usually €50, but can be more.
But if you are worried about another price hike within the next year, you could now consider a fixed tariff available from new market entrant, Just Energy.
"Once all of this summer's price hikes come into effect, Just Energy's fixed rate tariffs will be amongst the cheapest on the market, so it's likely we will see more people opting for these," said Clarke.
"With wholesale prices only going one way, opting for a fixed rate could be a good option for consumers who want some peace of mind as we come into winter."
The downside, of course, is that if prices ever drop then you would not benefit from any savings, but that seems unlikely based on current trends. You could also register with One Big Switch, a consumer network that campaigns to unlock group discounted electricity and gas. It is currently offering a dual-fuel discount of 28pc and an electricity-only discount of 28pc to new and existing customers of Bord Gais.
So if all these discounts, offers and incentives is evidence of some competition in the market, the blame for high electricity prices in particular - the fourth-highest in the EU - may have to be levelled at our heavy dependency on imported fossil fuels in the EU for electricity generation.
"We need to continue to invest in renewable and indigenous sources of energy so that we're less at the mercy of wholesale international energy markets in the future," said Cassidy.
Sunday Indo Business