Switching Energy Suppliers: A Smart, Stable, Saving Guide

As we move into 2024, the UK energy market continues to evolve, presenting both challenges and opportunities for consumers looking to save on their dual fuel energy bills. With the ongoing effects of the energy price cap, the increasing adoption of smart meters, and the growing demand for green energy, it's more important than ever to make informed decisions when switching energy suppliers and finding a good dual fuel tariff.

The UK Energy Market in 2024

The UK energy market has undergone significant changes in recent years, with the introduction of the energy price cap, the rollout of smart meters, and the growing focus on renewable energy. As we enter 2024, it's crucial to understand these key trends and how they impact your energy choices.

The UK Energy Price Cap

Introduced by Ofgem in January 2019, the energy price cap aims to protect consumers on default tariffs from overpaying for their energy. The cap limits the amount that suppliers can charge per kilowatt hour (kWh) of electricity and gas and is reviewed and adjusted twice a year.

As of October 2023, the energy price cap for default tariffs was set at £1,042 per year for a typical dual fuel household, a 2% increase from the previous cap. While the cap provides some protection against rising energy prices, it's important to note that it doesn't limit your total energy bill, which will vary depending on your usage.

Unit Prices and Standing Charges for Electricity and Gas, 1st January – 30th June 2024

Here are the energy price cap per unit and standing charge for electricity and gas from 1 January to 30 June 2024:

The figures are rounded to two decimal places and are based on the average for individuals in England, Scotland, and Wales who make payments via Direct Debit. VAT is included in these calculations.

Compare Now

Costs Included in the Energy Price Cap

Different expenses are factored into the price cap. Adjustments to these expenses will impact the price ceiling during each review. For instance, an increase in supplier payments will raise the price ceiling, while a decrease will lower it.

Here are the cost adjustments from 1 January to 30 June 2024 for payments made via Direct Debit:

These costs are managed by the network administrator, who is responsible for maintaining and upgrading the energy infrastructure.

Summary of Changes to the Energy Price Cap by Payment Method and Meter Type

Here is a summary of the changes to the energy price cap by payment method and meter type:

All bill values presented in this document are calculated using the current Typical Domestic Consumption Values (TDCVs), 2,700kWh for electricity, 11,500 kWh for gas and 3,900 kWh for multi-register meters, such as Economy 7 customers. All values are rounded to the nearest £.

Source: Ofgem

Smart Meters and Energy Usage Insights

The UK government has set a target for all homes and small businesses to have smart meters by 2025. Smart meters provide real-time energy usage data, enabling consumers to better understand and manage their energy consumption. By 2024, it's expected that over 85% of UK households will have smart meters installed.

Smart meters can help you identify areas where you can reduce your energy usage and save money on your electricity bill. Some energy providers offer additional tools and services, such as mobile apps and tailored energy-saving advice, to help you optimise and lower your energy consumption.

The Growth of Green Energy

The UK has committed to achieving net-zero greenhouse gas emissions by 2050, and the energy sector plays a crucial role in reaching this target. In 2024, renewable energy sources are expected to account for over 50% of the UK's electricity generation, up from 43% in 2020.

As consumer demand for environmentally friendly energy options grows, more suppliers are offering green energy tariffs backed by renewable energy certificates (RECs). These tariffs ensure that for every unit of electricity you consume, an equivalent amount of renewable energy is generated and fed into the grid. Please note, you can get a fixed deal green energy tariff from your default supplier. However to avid switching to most expensive green energy tariff we recommend to compare energy prices.

Compare Now

UK Energy Generation Mix: 2020 vs. 2024 (Projected)

To better understand the shifting landscape of the UK energy market, let's take a look at the projected changes in the energy generation mix between 2020 and 2024.

As the table above illustrates, renewable energy sources are expected to make up the majority of the UK's electricity generation by 2024, with a projected share of 52%. This represents a significant increase from the 43% share in 2020, highlighting the rapid growth of green energy in the UK.

Conversely, the share of natural gas in the energy mix is expected to decline from 36% in 2020 to 30% in 2024, as the UK shifts towards cleaner energy sources. Nuclear power is also projected to slightly decrease its share, while coal will continue to play a minimal role in the energy generation mix.

This shift towards renewable energy has important implications for consumers. As more suppliers invest in green energy projects and offer competitive green tariffs, you may have the opportunity to support the UK's low-carbon transition while potentially saving money on your energy bills.

When comparing energy tariffs, consider the fuel mix of each supplier and look for those with a higher proportion of renewable energy. Some suppliers may also offer additional environmental benefits, such as carbon offsetting or investments in local green projects, which can help you further reduce your carbon footprint.

Energy Switching Market Statistics

The UK energy switching market has experienced significant changes in recent years, with the number of supplier changes fluctuating due to various factors such as the energy price cap and market conditions.

Source: ElectraLink, Ofgem, Cornwall Insight

As shown in the table, the number of energy supplier changes in 2022 was significantly lower compared to 2021, with a 73% reduction. This can be attributed to factors such as the stabilisation of the energy market and the impact of the energy price cap.

For 2024, the Energy Price Cap is projected to undergo several adjustments throughout the year, with decreases in April and until September, followed by a slight increase from October onwards. These changes in the price cap can influence consumer behaviour and the potential savings available from switching energy suppliers.

Potential Savings from Switching

Switching energy suppliers can lead to significant savings on your energy bills, depending on your current tariff and the different deals available in the market.

Source: Energy Comparison Sites

By switching from a Standard Variable Tariff to a fixed-rate tariff, you could save over £280 annually on your energy bills. Additionally, using energy comparison sites to find the best deals can result in potential savings ranging from £200 to £450, with an average of around £300 per year.

Compare Now

Renewable Energy Mix and Benefits

As the UK continues to transition towards a greener energy future, it's worth considering the benefits of renewable energy sources and their contribution to the overall energy mix.

• Wind turbines contribute around 40% to the UK's renewable energy mix.
• Solar panels can provide up to 70% of a household's electricity needs and save households up to £460 per year in Scotland.
• Heat pumps can save households up to £1,100 per year on heating costs, depending on the system and property.

Comparing Energy Suppliers and Tariffs

To find the best energy deal for your needs, it's essential to compare a wide range of suppliers and tariffs. Consider factors such as price, stability, customer service, and environmental credentials when making your decision.

Fixed Rate vs. Variable Rate Tariffs

One of the key choices you'll face when switching energy suppliers is whether to opt for a fixed rate or variable rate tariff.

Fixed Rate Tariffs: With a fixed rate tariff or fixed plan, the price you pay per kWh of energy remains constant for the duration of your contract, typically 12, 18, or 24 months. This provides stability and protection against price increases, but you may miss out on savings if energy prices fall.

Variable Rate Tariffs: Variable rate tariffs fluctuate in line with the wholesale energy market, meaning your prices can go up or down. While you may benefit from cheaper gas and electricity prices when the market is favourable, you're also exposed to the risk of price increases.

Dual Fuel Contracts

Many energy suppliers offer dual fuel contracts, which combine your electricity and gas supply into a single dual fuel tariff. Dual fuel deals can often provide convenience and savings compared to purchasing electricity and gas separately.

However, it's important to compare dual fuel offers with separate electricity and gas tariffs to ensure you're getting the best overall deal. In some cases, you may find that combining the cheapest individual electricity and gas tariffs from different suppliers results in lower total costs.

Green Energy Options

As mentioned earlier, the demand for green energy is growing, and many suppliers now offer tariffs backed by renewable energy certificates (RECs). When comparing green energy tariffs, look for suppliers that generate or invest in renewable energy projects, such as wind, solar, or hydro power.

Some suppliers also offer additional environmental benefits, such as planting trees or supporting conservation projects, as part of their green energy packages.

The Switching Process: Step by Step

Switching energy suppliers is a straightforward process that can typically be completed online or over the phone. Follow these steps to ensure a smooth transition:

1. Gather your information: Have your most recent energy bill handy, as you'll need details such as your current supplier, tariff, and energy consumption.
2. Compare tariffs: Start looking for good deal by entering your postcode on a energy comparison website or contact suppliers directly to compare tariffs and find the best deal for your needs.
3. Choose your new tariff: Once you've found a suitable tariff, confirm your choice with the new supplier. You'll need to provide your personal details, energy supply information, and payment method.
4. Cooling-off period: After confirming your switch, you'll enter a 14-day cooling-off period during which you can cancel the switch without penalty if you change your mind.
5. Switch completion: Your new supplier will handle the switching process, which typically takes 17 days, including the cooling-off period. Your energy supply will not be interrupted during the switch.

Pitfalls to Avoid When Switching Energy Suppliers

While switching energy suppliers can lead to significant savings, there are some pitfalls to be aware of:

• Early exit fees: If you're on a fixed term contract with your old supplier, check if there are any early exit fees for switching before your contract ends. These fees can sometimes outweigh the savings from switching.
• Rollover contracts: Some suppliers automatically roll you onto a new fixed term contract when your current one ends. Be sure to opt out of automatic rollover if you want the flexibility to switch without penalties.
• Estimated usage: When comparing tariffs, ensure that the estimated annual consumption figures are accurate for your household. Underestimating your usage could lead to higher than expected bills.
• Standing charges: Be aware that some tariffs may have higher standing charges (daily fixed charges) but lower unit rates. Consider your energy consumption patterns when comparing tariffs with different standing charges and unit rates.

The contract termination process and the final bill from your old supplier

• Notice period: Check your current contract for the required notice period to terminate your agreement with your old supplier. Most suppliers require 28 days' notice, but this may vary depending on your specific contract.
• Meter readings: Provide accurate meter readings to both your old and new suppliers on the day of the switch. This ensures that your final bill from your old supplier is based on actual usage rather than estimates, lowering the risk of over- or underpayment.
• Outstanding balance: Your final bill from your old supplier will include any outstanding balance or credit on your account. If you have a balance to pay, settle this promptly to avoid any potential late payment fees or debt collection actions.
• Credit refunds: If your final bill shows a credit balance, your old supplier should refund this amount to you within a reasonable timeframe, typically 14-28 days. If you don't receive your refund within this period, contact your old supplier to inquire about the status of your refund.
• Direct debit cancellation: If you have a direct debit set up with your old supplier, ensure that this is cancelled once your final bill has been settled. This prevents any unauthorised payments from being taken after your switch is complete.
• Confirmation of switch: Once your switch is completed, you should receive confirmation from both your old and new suppliers. Your new supplier will provide you with account details, tariff information, and payment arrangements.

Compare Now

The Impact of Your Energy Usage

Your energy consumption habits play a significant role in determining your total energy costs. By making simple changes to how you use energy in your home, you can reduce your electricity bill and your environmental impact.

Energy Saving Tips

Here are some easy ways to save energy and money:

• Use energy-efficient appliances and light bulbs
• Turn off lights and appliances when not in use
• Adjust your thermostat to a lower temperature in winter and a higher temperature in summer
• Insulate your home to reduce heat loss
• Take shorter showers and use a water-saving showerhead
• Use a clothesline instead of a tumble dryer when possible

Monitoring Your Energy Usage

Regularly monitoring your energy usage can help you identify areas where you can make savings. If you have a smart meter, you can access real-time usage data and track your progress over time.

Future Energy Market Trends

As the UK energy market continues to evolve, several trends are likely to shape the landscape in the coming years:

Increased Renewable Energy Adoption

With the UK committed to reaching net-zero emissions by 2050, the share of renewable energy in the mix is set to grow. This may lead to more innovative green energy tariffs and solutions from suppliers.

Energy Storage Solutions

The growth of renewable energy is driving the development of energy storage technologies, such as batteries, to help balance supply and demand. As these solutions become more widespread, they may offer new opportunities for consumers to save money and support the grid.

Electric Vehicles and Smart Charging

As electric vehicle (EV) adoption increases, the demand for smart charging solutions that optimise energy usage and costs will grow. Energy suppliers may offer specialised EV tariffs and services to cater to this growing market.

Artificial Intelligence and Data Analytics

Advances in artificial intelligence and data analytics will enable energy suppliers to provide more personalised and efficient services to customers. This could include tailored energy-saving advice, predictive maintenance for appliances, and dynamic pricing based on real-time energy demand.

Frequently Asked Questions

How often should I switch energy suppliers?

It's a good idea to compare energy tariffs and consider switching suppliers every 12 to 18 months, or whenever your current fixed term contract is coming to an end. This ensures that you're always getting a competitive deal and not overpaying for your energy.

Can I switch energy suppliers if I have a prepayment meter?

Yes, you can switch energy suppliers if you have a prepayment meter. Some suppliers even offer specific prepayment tariffs that may provide better value than your current deal. Just be sure to compare prepayment tariffs from multiple suppliers to find the best option for your needs. 

Will I experience any interruptions in my energy supply during the switching process?

No, your energy supply will not be interrupted during the switching process. Your new supplier will work with your old supplier to ensure a seamless transition, and you'll continue to receive energy as normal throughout the switch. 

What happens if my new supplier goes out of business?

If your new energy provider goes out of business, Ofgem will appoint a new supplier to take over your energy supply. This process is known as the "supplier of last resort" mechanism and ensures that your energy supply is not disrupted. You'll be transferred to the new supplier's deemed contract, but you're free to switch to another supplier if you find a better deal.

 Can I switch energy suppliers if I'm renting my home?

If you're responsible for paying the energy bills in your rented property, you have the right to choose your energy supplier. However, if your landlord pays the energy bills and then charges you, they have the right to choose the supplier. In this case, you can still discuss switching with your landlord if you believe there are better deals available.

Key Takeaways

• Regularly compare energy tariffs and suppliers to ensure you're getting the best deal
• Consider fixed rate tariffs for price stability or variable rate tariffs for potential savings
• Look for dual fuel deals that combine electricity and gas for convenience and savings
• Opt for green energy tariffs to support renewable energy and reduce your carbon footprint
• Use energy comparison sites and tools to find the most competitive deals in your area
• Be aware of pitfalls such as early exit fees, rollover contracts, and estimated usage when switching
• Monitor your energy usage and adopt energy-saving habits to reduce your bills and environmental impact
• Stay informed about future energy market trends, such as renewable energy growth, energy storage solutions, electric vehicles, and AI-driven services

By following the advice in this guide and staying proactive about your energy choices, you can navigate the evolving UK energy market with confidence and make informed decisions that benefit your household and the environment.

References

• [1] www.ofgem.gov.uk
• [2] assets.publishing.service.gov.uk
• [3] www.ofgem.gov.uk
• [4] www.electralink.co.uk
• [5] energysavingtrust.org.uk