Switch Off For Summer Savings!

With the average annual gas bill predicted to exceed £1,000 within three years, here are some tips on lowering your energy bills.

This article was first sent to Fools as part of our 'Summer Lolly' email series.

There's more bad news for hard-pressed householders, as the UK's biggest energy supplier warns that gas prices could rise by three-fifths (60%). Centrica, owner of British Gas, has warned that, with the decline of oil output from the North Sea, Britain is increasingly reliant on foreign energy suppliers.

What's more, thanks to the soaring price of oil (it has doubled in a year), the energy firm predicts that a typical gas bill could rise to £1,000 early in the next decade. Thus, it seems clear that we can look forward to lots more price rises to come.

At present, the average gas bill is around £645 a year; for electricity, it is £415. Thus, domestic-energy bills for a typical household come to around £1,070 a year. Here's how they've grown since 2005:

As you can see, in three years, the typical gas bill has increased by more than three-fifths (61%), with the average electricity bill up by more than half (51%). Overall, energy costs for a typical household have risen by 57%, or over 16% a year compounded.

Were energy bills to rise by the 60% predicted by Centrica, then here's how the average bill could look by, say, 2011: gas (£1,032) plus electricity (£640) equals £1,672. In other words, within three years or so, we could be paying around £600 more per household for domestic energy. That's another £50 a month sliced from our disposable income. Ouch!

Of course, Centrica's report into energy prices could be nothing more than spin aimed at cushioning the impact of slightly lower price hikes in future. Then again, as a spokesman for trade body the Energy Retail Association remarked today, "It looks like the era of cheap energy is over."

Last week, in Change Your Energy Tariff Today, my Foolish chum Laura Starkey explained how to cap or fix your energy bills in order to avoid future tariff increases. If you do so now, then you can avoid price hikes until the end of 2009 at the latest.

However, although I've been called a `tree hugger' by other Fools, I believe that energy conservation is a very Foolish thing. After all, you're saving money, being Green and saving the planet at the same time, which makes perfect sense to me. Here are dozens of tips to help lower your gas and electricity bills by using less energy:

         Start by reading the eleven tips in Save £2,816 by 2012.

         Next, try these Ten Ways to Save Energy.

         Here are more ways to Save Money By Being Green.

         Also, read Save Money By Saving The Planet.

         We're not done yet: here are a further Seventeen Ways To Cut Your Fuel Bills.

Here are six more common-sense ways to reduce your energy use:

1.    Think about the location and position of appliances. For example, in my previous home, I had a second, smaller fridge. However, I never used it, because it was foolishly placed right next to the oven. D'oh!

2.    Why boil half a kettle of water in order to make a single cup of tea? From my experience, less than 500ml (or quite a bit less than a pint) is enough for one cuppa.

3.    Don't let gas flames lick up the sides of your saucepans. Instead, make sure that the flame corona (crown) lies within the base of a pan.

4.    Get into the habit of switching things off when they're not in use. Leaving appliances on standby or charging is a complete waste of money. If it's humming, or has a little glowing light, then switch it off!

5.    In particular, be sure to switch off your PC and other computer kit. For instance, why have a wireless router on 24 hours a day, if you use it only for a fraction of this time?

6.    There's nothing wrong with turning down the thermostat and wearing a jumper around the house, even in the summer months.

Finally, don't waste money while you're away. Before you head off on your summer holiday, spend a few minutes switching off appliances. Even if you're on holiday for less than a week, make sure that your hot water and central heating are switched off. Also, unplug or switch off at the socket all electrical appliances which will be wasting money while you're away.

Examine each appliance and ask yourself: does this NEED to be left on, or can I switch it off and turn it back on when I return? Unless you have ghosts, no-one is going to benefit from, say, your DVD player or set-top box being left on standby while you're away!