Essential Tips for Fixed Price Tariff Switching

Ups and downs in domestic and industrial energy prices are as common as FTSE All-share index at London Stock Exchange. While writing this article, there are few headlines stating energy prices falls indicating deflation in Britain. But don’t make a big smile on your face because experts say it is just for few days only, prices will start rising again before you grab its benefit.

To reap the advantage of discount war between supermarkets, consumers have to be smart and enlightened with latest happenings. Technology may be helpful while making energy deals for household or industrial usage. There are number of price comparison websites like Free Price Compare that suggest best deals as per your consumption habits. As you know there are two types of deals available in market.

1: Fixed Rate Energy Tariff

In this plan you just don’t need to worry about price rises and falls during the contract period. Your bill won’t be affected by price rise. Sometime standing charges are excluded from the plans so hikes in standing charges will affect your energy bill.

2: Capped Rate Energy Tariff

This is also known as floating price plan because one can experience the price rise and fall in energy bills. This tariff plan is not long term like 18 months or 4 years. Mostly you can switch easily from this tariff plan.

Now the question is that if consumer is looking for fixed rate energy tariff plan but how can he/she ensure it will be remunerative. Price comparison website only populate the energy deals but user have to take the decision himself. The person who can forecast the energy prices’ ups or downs more perfectly can achieve more savings.

There are number of factors affect energy prices. Few of them are:

Global Demand:

As you know major chunk of electricity produced is through natural gas. Unexpected demand of natural gas and crude oil in emerging economy like India and China affects the global market price a lot. So keep eye on global demand and UK’s import of gas and crude oil.

Renewable Energy Production:

It’s very clear that progress in non-conventional energy production brings smile on your face by reducing energy bills. So you have to keep updated yourself with annual production of renewable energy and the government’s effort for empowering it. If financial experts forecast a significant growth in this energy production then you can expect the falls in energy prices in subsequent year or quarter.

Weather:

I don’t know you believe or not but Weather plays a major role on energy prices. Demand of wholesale energy (gas and electricity) goes up during the cold winter, because the household consumption of energy is usually higher than the hot summer days. You can forecast the energy prices by reviewing the annual weather system.

Policy and Politics:

This will impact indirectly or passively on energy prices. For example, the influence of legislature in the reducing carbon emissions. Users start saving energy by adopting more efficient appliances. Global infrastructure in energy sector also impacts on energy prices. India and China have invested millions of dollars to fulfilling the demand and curtailing the imports.

If you are able to analyze all these factors deeply, you can forecast the energy prices and as I have stated above, as much as nearest you predict the energy prices’ ups and downs, you can save more money by switching to fixed price plan.

Written by

Shay Ramani

Founder and Managing Director at Free Price Compare

Expert in Cost Saving and Financial Solutions