Your Complete Guide to Comparing Electricity Rates

By
Mortgage and Lending with Olympus Labs

Here's the thing: the average monthly electricity bill for Americans is just over $100. But if you're paying way more every month, you might want to compare electric rates.

The truth is, comparing electricity rates is essential in today's market of multiple suppliers of various energy types. Use this guide to help you compare before you sign!

How Can I Get Cheap Electricity?

Are you sick and tired of wondering, how can I get cheap electricity? You're not alone. Here's the thing: if you haven't taken a look at your energy bill lately, then you may not be on the best available plan. 

To tell you the truth, there's no one size fits all solutions when it comes to finding a cheap supplier of electricity. That's why it's so important to punch in your personal information and compare energy providers as soon as you can. Why is that?

It's simple: to uncover the most affordable energy deals in your region and for your household's necessities. For those who are searching for the lowest electricity and gas deals, it's all about taking the time to shop for a new supplier when your fixed contract is over.

Once that happens, chances are that you'll be rolled over onto a traditional tariff, which happens to be the least cost-efficient plan out there. Are you new to switching energy providers? If so, then you're in luck, because it's easy to find a better electricity deal in minutes online.

As a matter of fact, you might not even have to wait until your fixed plan ends to seek out a cheaper energy bill. Sometimes, all you have to do is talk to your current provider to see if they have a less expensive electricity and gas offer for you. In case you're curious about who the lowest-priced energy provider is, the truth is that it varies from person to person.

Yes, you read that right. Based on where you live, different energy suppliers change up their pricing. Not only that, but your bill will change depending on your electricity usage too. 

Now that we've got that down, it's time to talk about comparing electricity and gas rates!

Comparing Electricity and Gas Rates

Can we be totally honest with you? Despite the fact that you can easily compare electricity and gas rates together in a dual tariff, you can also compare them separately if you want to.

How do we know this? Since not every household uses both electric and gas, a lot of energy providers have tariffs for a single fuel type. If you're looking to compare electricity rates only, join the club. 

That's because certain countries like England have millions of citizens who don't rely on gas for their heating purposes. As a matter of fact, at least half of them use electricity as their main source of energy. But here's the thing: if your house doesn't need a gas tariff, then there's no harm in looking for tariffs that are electricity-only.

What about the homeowners that actually use both electricity and gas? That's easy - just make sure that you get both a gas and electricity plan. Otherwise, you can choose different tariffs or providers for both kinds of fuel if you'd like.

Let's talk about comparing gas rates only. Incredibly enough, there are literally tons of suppliers that specialize in gas services. Pro tip: try comparing dual-fuel tariffs and gas-only plans to figure out which energy offer is best for you.

You might be wondering: what is a kilowatt-hour? We're glad that you asked. To put it simply, a kilowatt hour is a unit of measurement that keeps track of your energy usage.

The craziest part is this - plugging your kilowatt information into an electricity cost calculator can predict what your upcoming bill will be too!

Making the Energy Switch

Curious about making the energy switch? You've come to the right place. First of all, you've got to find out what pieces of information you need to compare energy rates, including: 

  • A postcode
  • An address
  • A current energy bill

If you don't have a current energy bill on hand, you don't have to worry as long as you know the amounts that you pay for electricity and gas. And "guesstimating" your bill amounts works too. Just make sure that you have the payment and contact details for your old account so that switching energy providers can be easier than ever.

Okay, so you've officially switched energy providers...now what? When you've completed the process, your new energy supplier to contact your older energy supplier to decide on the right date to switch. After that, you should prepare to receive a letter and a welcome pack for your newest electricity and gas provider.

Not only will this package talk about your agreements with the new provider, but it will also outline the next steps of the process. Thus, you'll never have to be concerned about your energy supply getting cut off. Sounds good to us!

Now, how long does it take to switch energy suppliers? First things first, running a quick online energy comparison usually only takes a couple of minutes. But here's the kicker: after you've made the switch, there's typically a two-week-long period that will let you cancel everything if your plans change. 

Overall, you should expect the entire energy switch process to take a little over 14 days. How can you beat that? 

All About Switching Energy Providers

Want to know all about switching energy providers? To make sure that your energy bill is completely accurate, you can contact your provider to see if your monthly fee is based on actual or estimated reading from your meter reading.

What about switching energy providers while on a prepaid meter? If that's the case, then you can choose "prepayment meter" as a way to pay your energy bills.

That's not all. As long as you have a prepayment meter, you can even use a smart token, key, or card to pay your bill in advance.

In addition, you can even swap out your prepayment meter setting by requesting a credit meter instead. Moving forward, how can you possibly switch energy providers if you're a renter? Let us explain.

Fortunately enough, switching energy providers when you're renting isn't as complicated as you'd think it'd be. The only thing that would make this process difficult is if your property manager takes care of your energy bill for you, or if it's automatically taken out of your monthly rent.

Don't know how high your electricity bill will be? We suggest that you use a free electric bill calculator to find out!

Have High Bills? Here's Why

Have mega high gas and electricity bills? When it comes to your electricity and gas bills, it really has to do with how much energy your household uses every month.

Despite this fact, even the most careful energy users may experience increased energy bills for the following reasons: 

  • Your previous fixed priced plan is over
  • Your old energy provider raised rates 
  • Your energy tariffs are based on meter reading estimates

If you have a sudden hike on your recent energy bill, the problem could come down to the fact that your previous fixed priced plan is over. As the name suggests, the beauty of a fixed priced plan is that it guarantees you against rate hikes in the future. Sadly, these money-saving plans can come to an end, which means that you'll most likely be rolled over to a different plan with new rates.

While this is often known as a default or standard variable bill, it's also the priciest one that your energy provider could offer. Another thing to consider is the possibility that your old energy provider raised rates. Are you someone that's on a default or standard variable plan? 

If so, then you might run the risk of your energy provider raising rates whenever they want to. For instance, a lot of energy companies increased their prices as a result of Ofgem's recent energy rate cap. Lastly, it's essential to know that your energy tariffs are based on meter reading estimates as well.

Variable Rate Tariff vs. Fixed Rate Contracts

Are you familiar with variable rate tariffs versus fixed-rate contracts? Allow us to enlighten you. After you've thoroughly compared different energy providers, you'll have the chance to select from the tariffs that are available. Of course, this could include variable price tariffs or fixed rate contracts.

For those who are unaware, a fixed rate contract can last anywhere from one to two years, guaranteeing you a reduced energy rate during this time. On the other hand, variable price tariffs are a little bit more trickly, going down or up as the wholesale energy market changes.

However, don't get confused between variable price tariffs and standard price tariffs, which you'll typically be transferred to when your fixed rate contract is over. Once you decide which tariff you'd like to go with, you should be good to go!

Finding the Best Energy Supplier

Need help with finding the best energy supplier? We got your back. While the most high-quality electricity and gas supplier will have a lot of positive ratings, they may not exactly have the lowest prices.

That's why it's such a smart idea to run an energy comparison to see which energy provider can truly meet your needs. Since customer service is key, you'll want to go with an energy supplier that you feel comfortable talking on the phone with. And honestly, that might extend a whole lot further than the traditional, "big six" energy companies that we know about.

But wait - there's more. If you're feeling way too attached to your current energy provider, there's also a way to switch to the exact same supplier. For those who have never switched their energy provider before, you're more than likely on your supplier's default or standard variable tariff plan. 

As we mentioned above, this is usually one of the most expensive plans on the market. Do yourself a favor and find out if your current energy provider can offer you a better deal on your electricity and gas package. That way, you'll get to save money and they'll get to keep a loyal customer.

Looking for a reliable electricity supplier? We highly recommend that you check out Vault Electricity!

It Pays to Get to Know Electricity Rates

Want to know the bottom line? If you're looking to save money on your monthly electric bill, then it pays to get to know electricity rates.

From getting cheap electricity and comparing electric and gas rates to making the energy switch and examining high bills, we've got everything you need. New to the whole switching energy supplier thing? 

Have no fear, we're here to help. Luckily for you, all you really need is a postcode, an address, and a current energy bill to get started. Once you do a price comparison between electricity and gas providers, making the right decision should be a breeze.

Does your household run on both gas and electricity? If so, there's a special monthly plan for you too. Also known as a dual tariff plan, your energy provider should be happy to offer a reduced deal for you. And if not, then it might be time to consider finding a new one!

Want to learn more about real estate? Don't hesitate to check out our blog!

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Rainmaker
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Krystin Mitchell, CPA CFE
KLSM CPA Firm, PLLC - Houston, TX
Strategic Accounting & Tax Solutions

Hi David - Thanks for sharing these tips! 

Nov 12, 2019 11:42 AM #1
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David Jackson, MBA

Financial lending analyst
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