The top energy deals that could save you thousands on your bill
With electricity and gas price hikes kicking in, it's now even more important to switch to the cheapest deal you can get
Hundreds of thousands of families are now finding it more expensive to heat up their homes and to boil the kettle - due to a series of electricity and gas price hikes which kicked in at the start of this month. Furthermore, with more price hikes set to follow, most families can expect higher energy bills in the coming months.
SSE Airtricity increased its electricity prices by almost 6pc on November 1.
Bord Gais Energy's first price rises in three years also kicked in on November 1. A typical electricity bill with the company is now 6pc more expensive as a result; while a typical gas customer's bill is 3.4pc higher.
Next month, Energia will increase its electricity prices by 4pc while Flogas will raise its gas prices by 3.3pc. Electric Ireland will increase its electricity prices by 4pc this February.
All suppliers say that the price increases are due to the rising wholesale cost of energy. This is small comfort to consumers though.
The latest round of price hikes - and the increases to follow - makes it even more important to switch to the cheapest energy deal you can get. Otherwise, you could pay hundreds of euro a year more for your energy than you need to.
A typical household could save almost €340 a year by switching to a cheaper supplier for their gas and electricity, according to Eoin Clarke, managing director of the price comparison website, switcher.ie. "If you consume more energy than the average household, you could save up to €500 a year by switching," said Clarke.
Annual savings such as this will add up to thousands over the years - as long as you remember to switch each year so that you're on the cheapest rate for electricity and gas. Most electricity and gas contracts last for a year - as do any discounts you signed up to under those contracts. "When a 12-month discount ends, you'll typically fall back to a standard tariff - or a lower discount," said Clarke. Your energy bill will become more expensive than it was under the 12-month discount as a result - and so you will usually be able to get your energy elsewhere for cheaper.
The Sunday Independent surveyed the discount deals offered by the main energy suppliers. We examined the cost of electricity and gas for a family which uses the same amount of energy as an average household (that is, 4,200 units of electricity a year and 11,000 units of gas a year). The family lives in an urban area and don't have a Nightsaver meter.
Electric Ireland currently works out cheapest for the family for standalone electricity - through its 5.5pc discount and €175 switching bonus deal. Under that deal, the family's electricity costs €757 for the first year. (That €757 takes account of the €175 bonus - which is available to switchers). To take up the deal, the family must pay by direct debit and get online bills for a year. Should you be considering this Electric Ireland deal however, remember that the supplier's electricity prices will increase by 4pc this February - so a typical bill will become more expensive from then.
Energia has the second-cheapest electricity deal - though its 29pc discount and €50 cashback offer. Under that deal, the first year's electricity costs €776 (including the €50 cashback). The deal is available to switchers and conditions include online billing and payment of bills by direct debit. However, as Energia will be increasing its electricity prices by 4pc next month, its bills will also become more expensive from then.
The best standalone electricity deal offered by Bord Gais Energy is its 24pc discount - and under this offer, a year's electricity costs €842.
Under SSE Airtricity's best electricity deal (10pc discount plus €100 credit), the first year's electricity costs €874. SSE also has an 18pc discount offer which has no cashback - and under that deal, a year's electricity costs €910.
Last September, Just Energy became the latest new energy supplier to join the Irish market.
Just Energy's best standalone electricity deal is its 12-month Rate Saver offer. Under this deal, a year's electricity costs €875. This is more expensive than the best discounted deals currently available from the main suppliers. However, under this offer, the rate charged by Just Energy for electricity is fixed for a year - which protects its customers from price rises for a year.
This makes Just Energy's fixed rate offer different to those typically offered by other market players. The larger energy suppliers offer discounts off their standard electricity tariff, which is usually variable and so the rate charged for electricity can go up if the standard tariff rises. To take up the 12-month Rate Saver offer, you must pay by direct debit and sign up for online billing.
The cheapest standalone gas deal for the family is Electric Ireland's 5.5pc discount and €175 switching bonus offer. Under that deal, the family's gas costs €527 (including the bonus) for the first year. Conditions of this deal include online billing and the payment of bills by direct debit. Electric Ireland has not announced any plans to increase its gas prices next year.
Flogas offers the second cheapest gas deal - through its 25pc discount offer. Under that deal, the first year's gas costs €596. To take up this deal, the family must pay bills by direct debit and sign a year's contract. However, the cost of a typical bill with Flogas will increase next month when Flogas raises its prices.
Just Energy offers the third-best deal - through its Rate Saver 12-month offer. Under that deal, the first year's gas costs €608.
To get the best switching deal, pay your bills by direct debit, get your bills online (rather than in the post), and sign up to a year's contract. You may also get a better deal if you switch both your electricity and gas to one supplier.
Before signing up to a supplier, compare the total cost of a year's electricity or gas with all other companies on the market. You can do this on price comparison websites such as switcher.ie and bonkers.ie. Even if a supplier offers a higher discount than others, it could be charging more for a standard unit of electricity or gas than others - and so the discount may not be as valuable as you think it is. Some companies also have more expensive standing charges than others.
A company which is offering a cashback deal along with a small discount could work out cheaper than a supplier which offers a higher discount but no cashback deal. Remember, however, that the benefit of a cashback deal usually runs out after a year - so be sure to switch to a cheaper rate or supplier after your year is up.
Most energy suppliers will not notify you in advance that your contract is about to come to an end. It is important therefore to make a note of the exact date that your energy contract will expire - and to move to a plan with a similar or better discount once your contract is up.
Be careful not to switch before your contract is up though as you will typically be hit with an exit fee if you do so - and exit fees can run into the hundreds of euro. The exit fees for breaking a 12-month contract are typically €50 per type of fuel, according to Clarke. Therefore you could face an exit fee of €100 for switching from a supplier which you have both your electricity and gas with - assuming you switch before an annual contract is up. "There are some 24-month energy contracts and the exit fees on such plans can be as much as €200," said Clarke.
Be prepared, too, for security deposits, particularly if you have no customer history with a company and don't wish to pay your bills by direct debit. Security deposits - which are imposed by suppliers to protect themselves from customers failing to pay bills - can be as high as €300. As deposits must typically be paid shortly after you sign up, they can be a shock. Security deposits are refunded in time - as long as your account is in order. With some suppliers, a security deposit is refunded if you start paying your bills by direct debit - or after you have been a certain amount of time with the company.
Sunday Indo Business