This mistake will make your energy bills soar

Make this mistake and you'll regret it when your energy bill lands on your doorstep.

Britain could be heading towards an energy crisis, according to a new report from power regulator Ofgem. The watchdog this month warned that, without significant investment and an overhaul of Britain's energy infrastructure, our ever-growing domestic power needs could push the average annual energy bill beyond the £2,000 barrier by 2015.

This terrifying prospect means that it's now time to think about your energy consumption. Failing to address this issue won't just damage the environment - it will have serious ramifications on your bank balance.

Fortunately, you don't have to spend thousands kitting out your home with new appliances. Just by adopting a few good habits and making smart purchases when you replace big-ticket items, you could shave up to £300 off your annual energy bill.

First steps

Your first move is obvious but still worthwhile - even if you have before, use our gas and electricity comparison service to ensure you're on the cheapest possible tariff. You can maximise your savings by switching at the right time - you could save in excess of £200 by switching from an average tariff to the cheapest 'dual fuel' deal for gas and electricity.

If you need a helping hand, you can visit our "goals" centre and adopt the resolution to Lower Your Household Bills. 

Get a greener boiler

If your current boiler has failed to keep pace with this most severe of winters, it's probably time to switch to a more-energy efficient model. The initial outlay isn't cheap but you'll recoup the estimated £2,500 cost in just a few years - and, following the introduction of the Government's Boiler Scrappage Scheme, gas suppliers are bringing down the cost of upgrades by hundreds of pounds.

So, how do you know whether to switch? Boilers are graded from A to G according to their energy efficiency by the Energy Saving Trust - G-grade boilers are typically more than 10 years old, have a pilot light permanently on, and comprise a single combustion chamber.

A-grade boilers, in contrast, are typically 'condensing' models that cunningly reuse heat that would otherwise be wasted. There are two types of condensing boiler - 'regular' condensing boilers heat your hot water through a hot water cylinder. 'Combination' models give you instant hot water without the need for a cylinder.

Under the scrappage scheme, 175,000 low-income households in England can get a £400 grant to upgrade their boilers. Yet even if you're not eligible, it could still be worth upgrading - figures from the Energy Saving Trust show that annual energy bill for the average detached home is £235 cheaper with an A-grade boiler. What's more, mainstream suppliers have also brought down their prices - British Gas is currently offering reductions of up to £1,052 on new boiler and installation packages.

Finally, make sure any boiler is installed by a professional signed-up to the Gas Safe Register scheme - and check to see if you're eligible for one of the many grants available from the Energy Saving Trust.

Watch your water use

The Energy Saving Trust estimates that installing just a few simple water-saving measures could save a typical household £225 per year on combined water and energy bills. The energy used to heat water comprises some 23 per cent of our total annual consumption, yet households can reduce that figure by as much as 10 per cent with some inexpensive fixes.

One vital measure is to refit shower heads and taps with low-usage models. By simply replacing a 16-litre per minute shower head with a six-litre per minute model could contribute towards annual savings of £225 for the average one-child home. That's a hefty saving in exchange for the typical £30 cost of a low-flow shower head.

And the thrifty savings don't end there. Doing the washing up in a bowl rather than under a running tap can bring bills down by some £40 a year and has more impact than installing water-saving technology. Installing a water displacement device can cut the water used when flushing your toilet and shave £20 off your bills in exchange for a sub-£10 outlay.

It also pays to keep an eye on your washing machine. An old energy-sapping model can use as much as 20 per cent more energy than new energy-efficient models - look for a model with an A-grade European Community Energy Label to enjoy the biggest saving. You should be able to buy a new model for little more than £200 - and you could spread the cost with a 0% credit card deal for new purchases.

If you use a washing machine turn the temperature down to 30°C - the reduction will shave £10 off your annual energy bill. What's more, modern washing powders are so efficient they do not need to be used at high temperatures - so your clothes won't suffer. Even better, get into the habit of hand-washing and just using your machine's spin function to save both time and money.  

Tame your power-hungry TV!

Our sophisticated gadgets are the biggest drain on the nation's energy bills. Consumer electronic items such as flatscreen TVs, mobile phones and laptops account for a third of our annual energy usage - and that figure is set to hit 45 per cent by 2020.

The humble mobile phone accounts for a huge percentage of that consumption - more than 9m households charge up their gadgets overnight, with 22m needlessly charged every day. In fact, most models only need to be plugged in for about two hours.  And finally, the cost of leaving items on standby shouldn't be overlooked - the EST estimates the average household could save £37 a year through avoided standby use alone.

Luckily, you can get an energy-saving gadget - known as a standby-saver - to help with this, for as little as £14. Here at lovemoney.com, we were given one for free by Nigel's Eco Store. Find out what we thought of it (and some other nifty energy-saving devices) here on the Editor's Blog.