Cheap Energy Guide

If you want to know exactly how to switch to a cheap energy provider and get the cheapest deal then this is the guide for you.

The energy market can seem complicated but what it boils down to is choosing an energy tariff from one of the many utility companies in the UK. You can do this directly by going to the energy companies website, by using an energy comparison service or if you are a business rather than a domestic customer can use the services of an energy broker.

It's not as straightforward as asking which utility offers cheap gas and electricity as prices change all of the time. One week Avro Energy could have the cheapest energy tariff and the next week it could be Yorkshire Energy.

Energy companies and energy tariffs

There are a lot of energy suppliers in the UK who you can switch your energy supply to. You never physically switch anything when you move, say from British Gas to Bulb, you still have the same connections coming into your home or business and the same gas and electricity is used. The only difference is which energy provider you pay for the energy you use.

Every UK energy provider has at least one energy tariff or energy rate. The tariff is the rate that you pay for your energy with the difference being some tariffs cost less and some cost more.

Energy tariffs

It's useful to know what an energy tariff is and how to compare them but it is not essential as all energy companies and comparison sites give you the total amount you would pay for your energy, this is the energy quote. So if you are really not interested you can skip to the next section.

A tariff is made up of a daily standing charge and a unit rate per kWh, both gas and electricity are measured in kilowatt hours for the purpose of billing.

Bulb Energy tariff

The table below shows Bulb's energy tariff, they only have one tariff which is their Vari-Fair tariff.

Tariff Electricity daily standing charge Electricity pence per KWh Gas daily standing charge Gas pence per KWh
Vari-Fair 20.56 14.255 20.44 2.725

So from the table you can see that Bulb charges its customers 20.56p (about 20 pence) per day for being connected to the electricity supply. These charges vary from supplier to supplier and from region to region as the UK is divided into energy regions that affect costs.

Bulb then charges you 14.255p (about 14 pence) for every kWh of electricity you use. The lower unit cost the less you will pay for the electric you use to power you electrical devices in your home or business.

Bulb Energy tariff

For comparison below are the energy tariffs from Outfox the Market.

Tariff Name Electricity daily standing charge Electricity pence per KWh Gas daily standing charge Gas pence per KWh
Fix'd 20 11.0 11.32 12.60 11.32 2.49
ONE GREEN FLEX 2.0 26.25 11.87 24.88 2.07
FIX'd 20 5.0 23.10 12.24 24.99 2.10
Fix'd 20 5.0 Plus 26.25 11.87 24.88 2.07

These are some of the tariffs from another energy provider 'Outfox the Market' and as you can see from the table they have multiple tariffs available for you to switch to.

If we pick the 'ONE GREEN FLEX 2.0' tariff you can see that this tariff has a daily standing charge of 26.25p (about 26 pence) and a charge of 11.87p (about 12 pence) for every unit (kWh) of electricity you use.

On a very simplistic level if you wanted to figure out which tariff offered the cheapest electricity you would see which tariff has the lowest cost daily standing charge and the lowest cost per kWh.

However in reality it is not that easy doing the working out yourself as one supplier could have a higher daily charge but a lower kWh charge. You will also not be aware which companies in the UK are available for you to switch to, whether they offer dual fuel energy, economy 7 or renewable energy.

How to compare energy suppliers

To be able to do an accurate comparison of all the energy companies that supply gas and electricity in the UK you need to do an energy comparison. There are energy comparison sites that know who the energy companies are and what tariffs they offer.

If you are a micro, small or medium sized business (SME) then energy costs are generally more expensive if you go direct to the supplier compared to using an energy broking site.

It is not practical for you to visit every energy companies website to ask for a quote which is why gas and electric comparison sites exist.

Details you need to compare for cheap energy

The two most important bits of information that you need are your address (i'm pretty sure you'll know that already) and your energy usage figures in kWh (you probably won't know that offhand).

To get your energy usage figures you will need to find a recent paper bill or if you manage your current energy account online or with an app you can get the details there. You'll need to find your annual energy usage for gas and electricity and these numbers will be in kWh.

looking up your kWh energy usage

As you can see from the image above taken from a domestic energy statement from a current supplier they show you exactly the information that you need. Having these details will make your quotes more accurate.

Making the comparison

Many energy comparison services will be able to do a comparison for both business and residential gas and electricity.

Two trusted and long established business comparison sites are Love Energy Savings and Energylinx both of which show you the tariff information and compare suppliers.

For domestic energy comparisons there is the list of Ofgem accredited comparison sites I mentioned earlier. I have tested all of these sites side by side, average savings range from £250 to £450 per year.

For a step by step detailed guide on switching read our guide on how to switch energy supplier which will explain the steps.

Tips on how to get cheap energy

The first tip is to get the cheap energy deals when they are available as they tend to be short lived. You can often lock in a below market rate cheap energy deal for a year or more but these cheap tariffs tend not to stick around for long or come up very often.

I've set up a 'Cheap Energy Alert' whereby when I discover a once in blue moon deal being offered by a supplier I can email you the details. The great thing is that I only include deals that are genuinely cheap so I don't send out many emails. These are deals with no strings, I just let you know as soon as I discover them.

The second tip is that when you are doing the comparison is to select the 'whole of market' option so that you see all deals even the ones that the comparison service cannot switch you to.

You tend to be able to save a bit more if you are willing to go direct to the energy suppliers website and switch. Hower it's a bit more tricky so if you are not comfortable with doing that you can always use the comparison service to switch to one of the deals they can switch you to.

Either way most homes and businesses can save money and pay less than what they are currently paying for energy and if you are one of the few that are already on a great deal then you don't need to switch so nothing lost.