Compare the Electricity Prices of Energy Companies for Cheaper Electric
Electricity prices in the UK are going to become more important as we make the transition to a greener economy. This process has already started with more wind power coming online in Britain and cost effective renewable energy storage solutions becoming a reality to provide a stable year round energy supply.
For domestic households electricity is going to become more important than gas as new homes from 2025 will no longer have gas boilers but instead rely on the likes of air source heat pumps for heating and hot water.
Gas currently costs just under 3p per kWh whilst electricity costs around 15p per kWh making a unit of gas 5 times cheaper than electric. Hence the reason we have gas heating rather than electric.
More homes will become electric only rather than the minority of homes that currently rely on electric storage heaters on Economy 7 tariffs.
On average we use 12,000 kWh of gas per year but only 2,900 kWh of electricity. With greater energy use being demanded from the relatively higher priced electric it will be even more important to ensure that you are getting a good energy deal.
Comparing the electric prices of suppliers
Whether you are on an electric only tariff or wanting to compare electricity prices (you can have your gas and electric from separate suppliers) this is a summary of how you can ensure you are getting the cheapest electricity prices for your circumstances.
Daily standing charge and kWh price
The cost of your electricity is made up of a unit charge measured in pence per kWh and a per day charge referred to as the daily standing charge.
The standing charge is to cover the costs of supplying the electricity to your home which includes the cost of physical infrastructure.
The kWh unit price reflects the cost of your energy from the wholesale energy market.
Fixed or variable tariffs
Energy providers generally offer both fixed price and variable rate energy tariffs. Variable rates mean that the standing charge and kWh unit price can change whilst fixed means that the price stays the same throughout the length of the fixed term.
For domestic energy the length of the fix is between 1 and 3 years with a 12 month fix being the most common. It is important to note that a fixed priced electricity tariff will cost more than the energy providers variable rate tariff.
The longer the length of the fixed term the more expensive the tariff will be.
Compare Electric for the cheapest price
Whilst the absolute cheapest price is the main criteria for many looking to reduce the cost of their energy bills others may be willing to pay a bit more for an energy supplier with the best energy reviews or just want a reliable energy provider will fair pricing.
The average electricity bill for a 3 bed house is £51 per month based on the annual energy usage of 3,100 kWh.
Switching just your electricity to the current cheapest energy deal would mean a switch to the variable rate Aqua One tariff from Neon Reef. It would result in a saving of £15.25 a month with a switch to a lower monthly rate of £35.75 a month rather than £51 a month.
Compare Electric for the cheapest 1 year fixed tariff
The lowest price electric only switch to a 12 month fixed price energy deal would be to energy provider Symbio Energy and their Low Fair and Green 12M Fixed 1 costing £39.26 a month.
A fixed energy tariff is more expensive than a variable rate as you are buying your energy in advance but it does mean that the rate you pay stays fixed. The Symbio Energy deal would reduce your monthly direct debit from £51 a month down to £39.26 saving you £11.74 a month.
Compare Electric for the cheapest 2 year fixed tariff
The cheapest 2 year fixed rate energy tariff for electricity is from Yorkshire Energy with their Green Settle - Fixed until 30th September 2022 tariff.
Yorkshire Energy's 2 year fix costs £43.24 a month which is £7.76 cheaper than our £51 for the average monthly electricity bill. A longer 2 year fix will cost more than a variable rate tariff or a 1 year fix as you are securing a fixed price for a longer period. As you can see this deal is still much cheaper than the average.
Compare Electric for the cheapest 3 year fixed tariff
The cheapest 3 year fixed rate tariff for electric is the Green Morse tariff from energy company Green.energy costing £51.25 a month.
The longer term domestic 3 year fixed energy deals are about the longest term that you can fix your electricity prices.
As you can see from our electricity energy price comparison that a 3 year fix is more expensive than both a 1 or 2 year fix. In this comparison it's only 25 pence more than the cost of the average monthly electricity bill.
Compare the electricity price if you want to pay on receipt of a bill
Not everyone can or wants to pay by direct debit so let's look at the electricity price you would pay if you paid when you received a bill in the post and paid by cash or cheque.
The cheapest energy supplier that allows payment on receipt of your quarterly bill is Neo Energy which charges £40.33 a month for the average household. Non direct debit payments are through a bank transfer but they also offer the ability to pay your energy bill with Bitcoin and they also offer discounts to cryptocurrency miners.
Beam Energy costs £46.13 a month on their 'Beam 12 months fixed (with exit fee) v2' tariff where you can pay when you get a bill but bills are sent monthly and not quarterly.
More expensive is the 'SSE - Online Energy v5 Paper Billing' tariff from SSE costing £51.62 a month but it allows you to pay on receipt of a paper bill.
It is getting harder and harder to find energy suppliers that will send out a paper bill let alone allow you to pay quarterly by cash or cheque. You will always expect to pay a premium. Direct debits payments offer the cheapest tariffs and most energy companies now charge a month in advance allowing them to offer lower prices.
Compare the electricity price for Economy 7
Economy 7 electric meters are usually found in flats and a far less common than standard single rate meters and smart meters. If you live in a flat then take a look at our breakdown of the average bills per month for 1 bed flats and see if you are a low or heavy energy user and whether you are paying more than you need to.
An Economy 7 tariff means that you are charged a higher rate for your electricity in the day and a lower rate at night. The cheaper night rate usually covers a 7 hour period and is generally from midnight to 7am however this will vary depending on your meter and your current energy provider.
A typical low energy user for a 1 bed electric only flat will use 2,400 kWh of electricity per year. Most of the electric will be used in the higher rate period during the day (about 58% or 1,392 kWh's) whilst the shorter off peak period uses the remainder (about 42% or 1,008 kWh's).
The cheapest electricity prices are from Neon Reef with their Aqua One tariff costing £28.61 a month for our low usage 1 bed flat.
If you wanted to stick with one of the Big 6 energy suppliers the cheapest deal comes from EDF from their Simply Online 1 Year Fix Sep21v6 tariff at £35.62 a month, quite a bit more than Neon Reef charges.
Electricity prices from the Big 6 for a low energy usage 1 bed flat on an Economy 7 tariff ranges from £35.62 a month (EDF - Simply Online 1 Year Fix Sep21v6) up to £41.41 a month (Scottish Power - Help Beat Cancer Fix and Save October 2022 Online).
UK Electricity prices per kWh
You can compare energy providers by looking at the electricity cost per kWh which as long as you take into consideration the electricity daily standing charge (they'll be a seperate one for gas) you can tell which tariff is going to offer lower priced electricity.
The price energy companies charge for each unit (measured in kWh's) of electricity you use can vary greatly. I'm not going to list every tariff here as there are thousands, but prices can vary from around 12p per kWh if you are just switching electricity to Neon Reef or as much as 24p per kWh with the most expensive electricity only switch to Ebico Energy.
The difference between the two tariffs is that Neon Reef specialise is electricity only switches and you have to take into account they have a daily standing charge. Ebico whilst they can do an electric only switch their most expensive tariff is a zero daily standing charge tariff.
Comparing electricity solely on unit costs is both impractical and not accurate enough. Try comparing electricity prices yourself using a comparison and see which energy provider comes out cheapest based on your UK energy region and energy usage.