Smart Consumer: Put the big chill on excessive home-heating charges with a new supplier
The energy markets are becoming more competitive, writes John Cradden
Our weather forecasters recently confirmed a fact about our weather that most of us are already chillingly aware of. Autumn has come a little earlier this year.
But to make matters worse, they are now predicting another big freeze this winter that promises to be just as bad as last year's, if not worse.
To make matters worse again, the costs of gas and electricity continue to rise.
Furthermore, the grants offered by the government towards the cost of insulating your home or other energy-efficiency projects have been cut following a revamp of the grant scheme.
The good news is that there has been a heating up of competition in the markets for both electricity and gas supply to households.
According to the Commission for Energy Regulation (CER), which regulates both markets, over 40% of all domestic electricity customers have switched suppliers since 2009, which ranks as one of the highest switching rates in Europe.
This year, there has been a renewed energy in the fight for new customers following the long-awaited decision by the CER in March to remove ESB's regulatory shackles.
The simple upshot of this is that ESB is now allowed to set its own electricity prices and actively compete for retail business, and has been offering discounts to both new, existing and returning customers.
In the last year alone, nearly 20% of domestic electricity customers, or nearly 400,000, have switched, says the CER.
ESB has also entered the domestic gas-supply market, in competition with Bord Gáis Energy (BGE), Airtricity and Flogas. The CER says that in the year to the end of June, 128,000 domestic gas customers, or 21%, have switched suppliers.
1 So are energy prices cheaper all round now that there's finally some decent competition in both markets?
Well, yes and no. It's fair to say that prices are more competitive than they would have been if ESB and Bord Gáis still had the electricity and gas markets all to themselves. You wouldn't have the attractive discounts from competitors of up to 14% off ESB's prices in a bid to get you to switch to them. Nor would you have a situation where ESB is currently the cheapest supplier.
2ESB is now the cheapest? Seriously?
Hold on, let me finish. Yes, as long as you sign up for direct debit and paperless billing, customers who switch to its new ValueSaver tariff today will be paying the cheapest price for their electricity.
However, BGE, Airtricity and ESB have all recently announced huge price hikes on either electricity, gas, or both, citing sharp rises in wholesale gas and oil prices.
So while ESB's ValueSaver tariff is currently cheapest, the discounts after October 1 will be apply to a higher standard unit rate of 18.37 cent rather than 16 cent, making it the most expensive supplier again.
Saving: Up to €170 a year for electricity supply based on average usage of 5,000kWh a year (urban, 24hr).
3You're wrecking my head now. Is it still worth switching providers?
"Yes, competition in the home energy market has created a bit of a merry-go-round for consumers, but it's still very manageable," says Simon Moynihan of price comparison website Bonkers.ie.
"Because energy tariff discounts and deals tend to last one year, it is a good idea to do an annual price check to make sure you're on the best deal."
Suppliers generally change prices about once a year, so signing up to new deal now should get you through the winter, he says.
"Also, most deals available now do not require an annual contract, so if prices change again suddenly, you can always switch."
4So what's the best deal right now? Or what's the easiest way to find out?
At the moment, according to Moynihan, ESB Electric Ireland and Flogas are the cheapest combination, but he advises checking prices again in October.
"It will probably be Airtricity and Flogas in October," he said.
"Dual-fuel" discounts can offer good savings, but to date, it has been cheaper for most households to get their gas and electricity from separate suppliers, he adds.
Bonkers.ie has an excellent price comparison facility for both gas and electricity on its website, into which you can enter your details and preferences and quickly find out the cheapest supplier -- including "dual-fuel" suppliers.
The annual price gap between the cheapest and most expensive combinations of gas and electricity suppliers, based on the average annual usage (5,000kWh of electricity, 30,000kWh of gas), according to the website, is a staggering €460.
MoneyGuideIreland.com is another website that regularly highlights the cheapest electricity and gas suppliers, although it's in the form of reports rather than a searchable comparison facility.
Saving: Up to €460 for both gas and electricity based on average annual bills
5What I really want to know, though, is how do I get rid of those aggressive door-to-door sellers who keep pestering me to switch energy providers?
You could try the standard line that Moynihan uses: "I'm already on the cheapest deal in the market!"
6I'll try that. So what about the energy-efficiency home-improvement grants? Are they still there?
Yes, there used to be three separate such grant schemes but they've now been merged into one called Better Energy Home (BEH).
But the bad news is that the amount of funding available under the new scheme has been reduced significantly.
For example, the grant for cavity wall insulation has been reduced from €400 to €320; heating control upgrades from €500 to €400; and heating control upgrades with a new high efficiency boiler from €700 to €560.
The biggest cut was reserved for solar panel water heating systems, which fall from up to €1,800 to a flat rate of €800.
The Sustainable Energy Authority of Ireland, which administers the scheme, says the reduced grants reflect more competitive prices for the work involved and the greater number of providers who can do the work.
Still, a reduced grant is better than no grant at all, after all.
Saving: Saving: Up to 30pc off the cost of the work with the BEH grant. Up to €800 a year, or 40pc on your bills with all BEH works.