Finding the best electricity tariff can be a complicated business. Here’s how to compare electricity tariffs and find the best deal.
Everyone has a unique way of living and this is catered for by the sheer diversity of electric tariff rates and deals on the market.
As soon as you start looking at your options you’ll be faced with a bewildering array of tariffs: fixed versus variable rate; capped, online, Economy 7 or 10 – all of which offer different prices and different ways of paying your bills.
Finding the best electricity tariffs
Just as beauty is in the eye of the beholder, the same is true for electricity tariffs. It’s impossible to decide which one is best overall – just which one is best for you.
Your choice will depend on all sorts of factors, such as how much electricity you use, when you use it, and how you like to pay.
Most electricity tariffs are charged on the basis of your Kilowatt Hour Usage (kWh). Most also have a standing charge attached. As a rule, electricity tariffs without standing charge have a higher kWh usage charge so this option works best if you do not use much electricity.
Having an idea of your usage each month is a must when you compare electricity tariffs because it’s the only way to find the deal that will actually work out cheapest for you.
Different electricity tariffs
While there are some nuances, there are basically two different types of electricity tariff: fixed, capped or variable.
A fixed electricity tariff freezes your bills at a certain rate, protecting you from any future rises for a certain amount of time. The downside of this option is that you’ll be locked in for the duration of a contract and may face exit fees should you want to get out of the contract early.
A variable rate, meanwhile, gives you the flexibility to move when you want, but means you’ll be at the mercy of the market. If prices rise, then you’ll pay more. Conversely if they go down you’ll pay less (in theory at least).
A capped rate could be seen as a best of both worlds option but these tend to be less available and more expensive. This type of tariff ensures your bill will not rise beyond a certain level meaning you’re protected if the price goes up and can benefit if it falls. However the chances are the capped rate will be higher than the standard charge so you could simply end up paying more overall.
When do you use your electricity?
When you use your electricity may also influence your decision. One of the more popular tariff types is Economy 7 which offers a discount for off peak times. This means you could benefit from a night tariff electricity discount which could be ideal if you work shifts or spend time working late. Our guide to Economy 7 offers more information about whether it’s right for you.
Paying your energy bills
You might also get a discount based on how you want to pay your bill. If you’re comfortable using online billing, the provider may give you a cheaper rate. It works for them as they can spend less on paper admin.
The same applies to paying by direct debit, most providers will give you a discount in return for signing up to pay monthly. You will need to make sure you submit regular meter readings so you don’t end up owing them money, or conversely, building up an excess of credit in your energy account.
Could dual fuel be cheaper?
Discounts can also be found by combining electricity with gas. It’s a standard way for companies to persuade you to have both gas and electricity with them. However, while a single company may provide discounts against its own charges there’s no guarantee a dual fuel tariff will be cheaper than if you split your energy supply between different energy companies. Compare both options and go for the one that works out cheapest.
You can use our best electricity tariff comparison table to compare energy quotes and find the best deal.