How to save cash by switching energy provider

Summer is here and energy providers have hiked their prices. Of course they have. Who's going to get hot and bothered about heating costs when we're all schlepping about in shorts?

Well, complacency comes at a cost. Switching can save you more than €400 a year.

Heating up

Energy prices have been on the up since spring, in fact. In April, almost all the State’s energy suppliers increased their prices.

An increase at that time from Energia will add more than €100 a year to the average household's annual electricity bill and about €48 to the average annual gas bill.

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In recent weeks Electric Ireland, Flogas, Pinergy, Panda Power and Iberdrola hiked prices for the second time this year. Bord Gáis Energy is the latest to announce increases for residential gas and electricity customers.

It’s new prices will increase a typical gas bill by €8.36 per month and electricity bills by €11.39 a month from August 8th.

Providers cite increased wholesale energy prices and increased network maintenance and transmission charges as the reason for the increases. Last October, the Commission for Energy Regulation (CRU) announced charges for maintaining and running the country's gas and electricity networks were going up, adding an estimated €29 to the average household's annual bill.

Providers have not been slow in passing on the cost to consumers.

You may not feel all these increases in your pocket right now, but come that big post-Christmas energy bill, when your heating and lighting has been on full throttle and coffers are likely drained, you’ll pay for not shopping around.

Switch to save

The best thing you can do to save energy costs is to switch provider, and do it every year. A report from the CRU last year found that, if a customer had switched to the best available discount tariff each year over four years, they could potentially have saved up to €726 on electricity, €494 on gas or €1,343 on dual fuel bundles over the period.

But despite these easily accessible savings, Irish consumers are pretty hopeless at getting the best deal on utilities, which seems odd for a country that was so triggered by water charges. When it comes to switching energy supplier, half of electricity and gas consumers surveyed said they have never done so, according to CRU data.

In 2020, just 16 per cent of gas and 16 per cent of electricity customers said they had switched in the past 12 months. Yet among those who had switched and saved, over 90 per cent of them said it was “easy”. So what’s stopping you?

Is it worth it?

Yes, switching is a boring task, and it will take about 30 minutes, but it’s easy money. And you will definitely feel like less of a mug. If your current supplier is paid up in full and your contract nearing its end, you’re in a prime position to switch suppliers and save money.

The main thing is to get a copy of your bill. This has all the information you need to use price comparison websites to find a better deal; bonkers.ieand switcher.ieare two switching sites accredited by the CRU. With a plethora of suppliers and plans, these sites will do all the legwork for you.

There are 14 electricity suppliers in Ireland. The average standard tariff comes in at €1,098, while the cheapest plan for the average customer is just €850 a year, according to switcher.ie. So switching could save you up to €247 annually.

There are eight gas suppliers. If you haven’t switched your supplier in more than a year, you’ll be on a standard rate. The average standard gas tariff comes in at €791, while the cheapest plan on the market is just €664, offering a saving for the average gas user of €127.

Some eight suppliers offer dual fuel plans. The average gas and electricity customer can save up to €444 by switching from standard tariffs to the cheapest deals, switcher.ieestimates.

There is no one silver bullet deal, however: it really depends on your actual energy consumption. You’ll find this on your bill, and if you can’t, use national averages to get an idea of prices.

The average Irish household's usage of gas is 11,000 kW/h with electricity usage at 4,200 kW/h, according to CRU estimates. This amounts to a household spend of approximately €781 on gas and €1,006 on electricity, according to bonkers.ieestimates.

Depending on your usage, you may make bigger savings by switching to individual gas and electricity plans rather than a dual fuel-deal, or you may prefer dealing with just one provider.

If your household consumes more energy than average, a provider with the lowest unit rate may be best. If you use a lower than average amount of electricity, a tariff with a high cash-back offer but a higher unit rate might work out a bit cheaper for you. The good news is that the price comparison websites will do all the maths for you.

If the better deal includes a discount for customers who pay by direct debit, don’t sign up unless your current account balance can cope. If you chose the direct debit option, a calendar reminder will help ensure you always have enough in your account to cover the bill and avoid penalties.

Some suppliers also offer online billing discounts. Not getting a paper bill can add to complacency, however, and suppliers love this. You can lose track of when your bill is, how much it’s for or when your contract ends.

If you do go with online billing, be sure to log in and check your usage and billing periodically and set an alarm on your phone to shop around before your contract ends. Otherwise you will more than likely roll over to an increased tariff - and all those year one savings and cash back you made when you switched will be for naught when the tariff hikes up in year two. Set a reminder to shop the market again.

How to switch

To switch suppliers, you’ll need your unique electricity meter-point reference number (MPRN) or gas-point reference number (GPRN). You can find them on your bill, along with how much energy you use and how much you pay now.

If the bill doesn’t show you when your current contract ends, call your supplier. If you are not in a fixed term contract, there are no penalties and charges for switching.

If the price comparison site finds a better deal, confirm it with the new supplier and they will inform your current supplier of the switch. There is no need for that awkward call with your old supplier and there will be no loss of service.

Catch up meter readings

It’s also important to provide an up to date meter reading when switching to ensure accurate billing. Catch-up bills dominate the complaints received by the CRU. This is where an actual meter reading shows greater electricity usage following estimated readings, and the customer has to back pay. The rollout of smart electricity meters should reduce such bill shock.

Electricity prices in Ireland are already 23 per cent above the EU average and the fourth most expensive in the 27-nation EU, recent figures from Eurostat show. Gas prices here are the seventh most expensive in the EU. So switch, and do it annually. You will offset the cost of increases from your supplier and will be able to leave the heat on for longer at no extra cost.

Better again, follow the energy saving tips on seai.ieto insulate, unplug and switch stuff off and you'll save even more.