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.

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