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Could You Save Money by Switching Energy Suppliers?

Paola Bassanese is a freelance author and writer specialising in food, lifestyle and entertainment.

Most households use a lot of electricity every day.

Most households use a lot of electricity every day.

The Cost of Utility Bills

Utilities such as gas and electricity can be a huge cost when it comes to running a household. Depending on your country of residence, the market for the supply of utilities may feature several providers competing on price.

In countries such as the United Kingdom and Ireland, for example, the energy supply market is very competitive, and comparison sites can display at a glance what tariffs each supplier charges to facilitate the selection of a new provider.

Are You Paying Too Much for Your Electricity?

Since we rely so much on electricity to run our day-to-day lives, it is useful to keep energy costs to a reasonable level. Many consumers may keep the same supplier for years, never investigating the opportunity to save money on their bills. Some may consider it is too much of a hassle to look for cheaper suppliers and may prefer to stay in the same contract.

The UK consumer website Which? surveyed consumers about their reasons for switching energy suppliers, and the number-one reason was cost. At times, suppliers apply flexible tariffs, giving them the opportunity to raise prices according to fluctuations in the market. Unexpected price hikes can make a dent in people’s house budgets, motivating them to look into cheaper tariffs.

When working from home, for example, daytime energy use is higher, and this is usually billed at a higher rate than nighttime use.

It can be boring to check how much money you pay on electricity bills, but it's useful to know if you could be paying less.

It can be boring to check how much money you pay on electricity bills, but it's useful to know if you could be paying less.

Special Offers for New Customers

Because the energy market can be competitive, suppliers are motivated to attract new customers, so they tend to offer monetary incentives such as lower tariffs for an introductory period or even cash back. Staying loyal to the same supplier may not be convenient in the long term because contracts with existing clients seldom feature discounts.

Before finding out if it’s a good idea to switch suppliers, though, it’s important to check the energy contract’s terms and conditions because there are likely to be charges such as cancellation fees. If a customer has been using the same supplier for years, the period in which penalty charges are applied may have elapsed.

How to Find a New Energy Supplier and Save Money on Bills

There are plenty of price comparison sites available that display tariffs for each provider. These websites earn a commission each time someone purchases energy from a featured supplier.

Examples of comparison websites include Switcher in Ireland and uSwitch in the UK, however, there are several more available. Ironically, it can be useful to compare comparison sites because each site tends to push some offers rather than others depending on the commission they have negotiated.

You can also check suppliers’ websites directly to see what introductory offers they have available. You can gain valuable insights about a potential new supplier and learn if they have features such as renewable energy.

The Commission for the Regulation of Utilities (CRU) in Ireland, for example, encourages consumers to actively look into alternative other energy suppliers than the one they are in a contract with or to renegotiate tariffs with their existing supplier.

Is renewable energy an important factor for you?

Is renewable energy an important factor for you?

Useful Things to Know When Switching Energy Suppliers

In Ireland, the switching process is done directly between the suppliers. You, as a consumer, only need to provide your information to the new supplier. This means that there will not be any awkward or embarrassing phone call or email to your existing supplier notifying them that you are leaving them. The new supplier will advise the old supplier of the switch and set up billing and payments.

Consumers need to be savvy and check several factors before switching. For example, they may be tempted by a generous cash-back offer, but the unit price for electricity may be higher than their current provider’s. If a household uses a lot of electricity, the unit price is the main factor to consider because the amount of cash back may not be enough to offset running costs.

Also, some contracts fix the energy tariff at a capped rate for a limited time—for example, one year—after which unit prices can go up. It is useful to consider whether it’s worth getting into a new contract with a time-limited discount in which tariffs are kept at a lower unit price only for an initial one or two years but will rise afterwards. In this case, are you prepared to switch again (as long as there are no cancellation fees), or are you better off choosing a different type of contract?

It is important to check online reviews of available suppliers. Sometimes, attractive introductory discounts can mask problems within an organisation—for example, below-average customer service or inaccuracies in the billing process.

Suppliers should offer a cooling-off period—in other words, a time window (for example, 14 days) during which consumers can change their minds about switching to a new contract. This can be useful in cases when a new offer becomes available from a different company that may suit your needs better.

Is Switching Energy Providers Worth It?

Switching energy suppliers and getting cheaper bills can pay off in the long term so long as you evaluate all the factors related to switching, particularly tariffs and customer service.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2021 Paola Bassanese

Comments

Paola Bassanese (author) from Ireland on September 21, 2021:

@elaine Thank you so much for your comment, glad to hear you have managed to save money on bills, too!

Paola Bassanese (author) from Ireland on September 21, 2021:

@umesh Thank you for your feedback, yes some countries have more regulations about the energy market and therefore it is unlikely they have a competitive market. Good point about upgrading the light bulbs.

Elaine Byers on September 21, 2021:

Yes I just switched for the first time this year, it's the only way to help keep bills down! Great article!

Umesh Chandra Bhatt from Kharghar, Navi Mumbai, India on September 21, 2021:

We have limited energy suppliers in India so we do not have much such choices but what we do is replace the old bulbs and tube lights with LED type new generation bulbs to save on energy. You might also be doing that in addition to the switching as you mentioned.

Paola Bassanese (author) from Ireland on September 21, 2021:

Thank you for reading Liz and for sharing your experience. I have switched several times both in the UK and Ireland, as long as you know when it's the right time to switch to avoid penalties it usually works out cheaper in the end.

Liz Westwood from UK on September 21, 2021:

We tend to switch quite regularly. Typically I have observed that energy companies lure new customers in with the offer of low monthly payments. It is not long though before these rise steeply. This is an interesting and helpful article.

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