The big energy rip-off
Robert Powell hits the streets to get your take on the recent hikes in energy prices...
In around a month’s time, nine million households will wake up £190 per year worse off.
Why?
Because British Gas is upping its rates... again.
The rise comes on top of last month’s tariff increases by Scottish Power and has fuelled fears of further hikes to come in the coming months.
Is gas and electricity a rip-off?
British Gas is upping its electricity prices by 18% and gas prices by 16% from the 18th August. This will add an extra £190 per year onto the bill of the average duel fuel customer.
Just last month, Scottish Energy also hiked gas rates by 19% and electricity by 10%. Centrica has also said it will be upping its tariffs by around 18% come August.
The British Gas rises comes seven months after its last hike of around 7% back in December – that’s despite the provider’s residential business making £740m of profits in the last year.
In fact, every member of the ‘big six’ group of energy companies have upped their tariffs this year, blaming a rise in wholesale costs on the global energy markets.
What do you do to save money on energy bills?
An obvious way to save money on your energy bills is to simply use less gas and electricity.
Try turning down your washing machine and thermostat as well as regularly defrosting your freezer. Blocking off draughts using PVC seals, excluders and insulation can also slash your heating bill.
Another way to save money on your energy bills is to simply switch to a cheaper provider.
Would you switch suppliers if rates got too high?
Most of the people I spoke to today said they would change suppliers if rates kept increasing, but most thought that it would be something of a hassle to switch.
If an energy provider wants to up your tariff, they legally must give you 30 days notice. From here, you have 20 days to reject the changes and a further 15 to find a new, cheaper provider.
Actually switching suppliers should take around six to eight weeks in total, throughout which your old supplier must keep you on your previous cheaper tariff.
A further way you could cut your bills is to use green energy.
Is using green energy in the home practical and affordable?
Last year the government launched a set of feed-in tariffs designed to make monthly payments to anyone who installs green technology. That’s in addition to the money you’ll save on your bills from using green energy. However you will have to shell out for the initial installation costs, which can often run into several thousands of pounds.
E.ON runs a similar scheme that utilises this government tariff and allows you to install solar panels for as little as £99. However only certain households are eligible and you’ll have to forfeit the monthly payments in order to receive the panels for the discounted price.
A further issue with these schemes is that you can’t actually store your green electricity and so any energy you don’t use straight away is sent back to the grid.
Using solar panels and green energy may be a frugal and ethical investment for some – but it’s certainly not practical for everyone. And with such unpredictable weather in this country, the level of financial savings on offer is debatable.
A more practical and affordable solution is really needed to tackle rising energy costs. Yes, we can all cut our bills by switching providers and insulating our homes – but if providers keep hiking rates, our only options for saving money on energy may be reduced to donning an extra sweater or buying another duvet.
What do you think?
Is gas and electricity a rip off?
Let us know using the comment box below.
More: Compare energy prices with lovemoney.com | Big energy hikes: now's the time to switch! | The dirtiest energy provider tricks
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Comments
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The big energy rip-off! (electricity bills) Yes Electricity went up 18% and gas also went up 16%. Bills are never ending story and nightmare of every house holder. There is not much we can do to stop it... But! There is something we can do to make it better for Us. Bills will never go cheaper and they constantly increases. How about having own power station installed on your roof? Yes "Solar Panels" are our way out from this ridicules situation. By installing Solar System you not only save on electricity but you also earn on it. This is one of the reason why bills going up. Lots of house holders investing PV Systems which make electricity providers left back. So what do they do? They rise the cost of electricity and gas to make it back. (People without solar panels will pay for people which installed pv systems). Government have guarantee a FIT's for 25 years tax free for people who install solar panels and get connected to the greed. That mean you can profit by selling energy you harvest. People who install solar panels wont be affected by electricity cost in any way if the system they installed will full cover the house holders needs. Installation of solar panels is not free but the energy you harvest is. Why Solar? Solar Panels are great long term investment. By installing Solar Panels you can save around £65.000 on your electricity bills in next 25 years. To find out more about solar panel system, government FIT's, Cost and savings go to: http://www.tudorsolar.com Tudorsolar offer on-line calculator and solar panels specification documents. It also help you to find direction of your roof and check is your house will profit from solar panel installation. (Great website with live on-line support in case if you have any question) Love it!
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@mtjearly I see your point about the profits, but as i said in my previous post, £3.40 per household per month is not a lot of money for these companies to be making in profit. Look at supermarkets and petrol stations, their is the real rip off. British Gas as far as i have read have not made any excuses for making a profit. As i also stated before, British gas include profit in their services, security, new installations, new business registrations, dyno rod and alert me businesses into one profit. This means they probably made a lot less from energy than we think. As for pensioners, the government has introduced a new scheme this year called "warm homes". All energy providers have to offer the service. It basically helps people who spend 10% or more of total annual income on their fuel bills. Energy firms must do this by giving a credit of £120 towards each account registered in February of each year to help with the winter bill. Not only that but registered customers also get assistance with their bills throughout the year by way of trust funds, insulation, home energy assessments, priority response with any faults in supply, and what is called "Guaranteed Supply" so anyone on the scheme will never be "cut off" by their supplier, well not legally anyway, I looked into what each company are doing with their profits. Most are spending their money on renewable energy and developing this. So effectively we are not just paying for the energy we are using now, we are paying towards the energy of future generations, by way of ensuring there are alternative ways of producing energy once we have used up all of the natural resources. Crazy i know but it makes sense. There is a much much bigger picture to fuel prices other than what comes through your meter, and at times like these, when we do not know for certain where the fuel to power millions of homes in the future will come from, i believe we should all try and accept these rises with a little bit of thought towards the future. I would hate to see my children's children struggling for heat or power because i got cheap energy when i was paying the bill. just my opinion and i don't mean to offend anyone. I also read that every energy company has been selling Gas at a loss since April this year, and that E-ON are heavily in debt.
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Whilst I understand that wholesale prices have risen, and that these businesses need to make a profit, I can't help but think that we'd be paying less if the industry was still nationalised. No one likes it when a big company announces big profits at the same time as big price rises. Oil companies and banks 'get away with it' by saying the big profits come from outside the UK - what's British Gas's 'excuse'? Saying that low prices would mean that we'd use more energy isn't strictly speaking true - if heating my house is cheap, I still wouldn't leave the central heating on whilst at work for example. The reality is that no one likes being cold, and yet for some (pensioners especially) they won't have much choice given the increasing prices.
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26 September 2011