Whether your electric bill has suddenly shot up, or you're just wondering why electricity bills seem so high in general, there are a number of factors which contribute to the size of an electricity bill. We'll explain the impact of the largest factors and how to manage them, from the types of appliances you use (and how you use them) to supplier billing errors to the type of tariff you're on.
Find out what you're paying for and use our tips to help reduce the monthly cost to run your home. Before we delve into those contributors, it's useful to see where your payments are going.
Breakdown of Electricity Bills
Are the electricity suppliers making a large profit at your expense? It turns out they aren't. In fact, they're losing money supplying electricity to UK households, despite the average cost of electricity per UK household reaching nearly £600 per year. Recently reported Ofgem data shows that electricity suppliers' pre-tax margin was -1.09% as of August 2017.
The majority of your electric bill pays for the wholesale cost of electricity (what the supplier paid for the electricity), network costs (costs to build, maintain and operate the electricity wires that supply electricity to your home) and operating costs (business costs to run an electricity supply company).
|Components of Electricity Bill
|Environmental and social obligation costs
|Other direct costs
|Supplier pre-tax margin
If your electric bill has suddenly risen, it may be because your previous tariff ended and you've been moved to a more expensive tariff by your electricity company—for instance, a Standard Variable Tariff, which is often a supplier's most expensive tariff. Whether or not this is the case, you may want to compare prices and switch to another supplier or find a cheaper tariff from the same supplier. To check for a cheaper energy deal it helps to have on hand:
- Your postcode
- The name of your current supplier (e.g., British Gas, EDF Energy, Npower, etc.)
- How you pay (e.g., monthly direct debit, quarterly direct debit, pay on receipt of bill, prepayment meter)
- The name of your current energy tariff (e.g., standard variable, etc.)
- How much you spend (£) or use (kWh) on gas and electricity
- Any exit fees
- A current meter reading
- Your Meter Point Access Number (MPAN) and Meter Point Reference Number (MPRN) - find these on a recent bill
- Bank details (if you'll pay by direct debit)
In a recent test Ofgem found that households saved £263 on average per year by switching.
Household appliances can be the largest contributor to your electric bills, even if they spend a majority of the time in standby mode. Some appliances are more power hungry than others, however, so it's useful to know the biggest offenders if you're wondering why your energy bills are so high.
In most households, the fridge uses more energy each year than any other appliance. While a fridge doesn't use a lot of energy each hour (in the range of 20 to 45 Watts per hour—much less than, say, the tumble dryer which uses 1300 to 2300 watts per hour), it's on 24/7. By running day and night, the electricity to keep your drinks cold and your food fresh can cost £30 to £60 per year. This is one appliance you'll want to make sure is energy efficient. When it's time to upgrade, buy the most energy-efficient fridge you can afford. Day to day, remember small tips that can make a big difference:
- Keep your fridge full (once cold, contents help maintain lower temps)
- Don't stand there browsing with the doors open (letting the cold air escape)
- Don't put hot or warm food in the fridge (let it cool on the counter first)
Dehumidifiers are some of the worst domestic appliances in terms of energy consumption. With average humidity levels reaching between 70 and 90% in most parts of the UK, many people use a dehumidifier in their homes. Unfortunately, dehumidifiers use between 250 and 750 watts per hour on average. Running a dehumidifier for 8 hours a day could increase your daily electric charge by £0.31 to £0.93. While this might not seem like much on a daily basis, it works out to between £113 and £339 per year, depending on the power consumption of your unit.
If you use a dehumidifier, we suggest checking its power consumption (it should be on the label or you can Google your particular model). If your machine is older and less efficient, you may want to consider buying a more energy-efficient humidifier—it could save you money in the long run, especially if it gets a lot of use in your home.
While traditional (and energy-inefficient) incandescent bulbs are practically a thing of the past, UK consumers still have a choice between bulbs with varying levels of energy consumption: halogen, CFL and LED. To get the equivalent light of a 60-watt incandescent bulb, you'd only use 6-12 watts for an LED, 13-15 watts for CFL or around 40 watts for a halogen bulb. If you're now using halogen bulbs, there is still a significant amount of savings to be found by switching to LED, especially since the cost of LED bulbs has come down significantly in the past few years—you can now find them for less than £3 apiece.
|How Much Electricity Do Light Bulbs Use?
|Approx. Watts per Bulb
|Annual Cost (6 hours per day x 20 bulbs, at 15.5 pence/kWh)
Occasionally, electric supply companies make billing mistakes. It's handy to be familiar with the terms on your energy bill, to help spot errors if they do occur. When you suspect a billing glitch, don't delay—call your provider ASAP.
While electricity certainly doesn't feel cheap, UK households spend around an average amount on electricity compared to other countries. If you want to lower your energy costs, it can really help to buy energy-efficient appliances and make sure you're on a good tariff.