Electricity is not really something any of us can do without. Whether you have a tariff or a prepaid meter the money soon seems to go, and the media is continually reminding us that prices are going up. Consumers are feeling badly let down by Ofgem, the industry regulators who put a cap in place to ensure that variable tariffs could only rise to a certain point, and then moved the cap higher leaving people feeling frustrated and angry.

Why Do Electricity Prices Keep Rising?

The price we pay for our electricity is directly linked to the price of gas. Whether you use gas or not is irrelevant, the price rises are linked, and there is nothing the industry is prepared to do about it. Only having a property that uses electricity will not save you any money on a tariff, so having gas as well is not something to worry about.

The rises in electricity costs have been blamed on the fact that this fuel is obtained by gas-powered generators in electricity stations. The gas price rise has been blamed on the fact that an unusually harsh winter depleted our stores and left us unable to produce more, as this is also dependent on the weather.

If we have another bad winter, the likelihood is that prices will increase again and if Ofgem moves the cap again, the whole thing becomes increasingly frustrating. The country is currently working on renewable energy sources, but despite this being bandied about for many years we are still not at a capacity that can support the country.

What Can We Do?

Well, the choices are somewhat limited as off-grid living is not really a thing for most people. We can install things like solar panels and wind turbines but as yet the technology is not widespread or affordable, and even those with solar panels use the grid.

In the meantime, switching provider is potentially the best way to save money. There are lots of comparison sites on the internet that do the leg work for you and save you having to trawl providers and get quotes. As Jason Smith, Operations Manager of Business Electricity Prices explains: ‘Using our online comparison tool can help you to establish whether you are paying too much and show you the options that are available to you.’

Once you have got your best deal, you will be in a stronger place to tackle your current provider to see if they will match the deal or whether you serve them notice and leave.

Generally, you need to be on a fixed rate tariff as this protects you against any future increases for the term of the contract, and suppliers will often not advertise these but try and get customers onto a variable tariff by leaving vital information out. Be sure to challenge your existing supplier about their fixed tariffs but do not be afraid to use the comparison sites to make the switch to a better rate if that is possible.

By Dumitru Midon

© 2019 Copyright Dumitru Midon - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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