Electricity-Only Deals

Understanding your electricity-only usage

When you have an electricity-only plan, your bill reflects the total amount of electricity you consume within a billing period, along with the applicable tariffs and fees. Here’s a breakdown of how your usage impacts your bill:

Electricity Consumption

• Measured in kWh: Your electricity usage is measured in kilowatt-hours (kWh). This is the unit of measurement for electricity consumption.
• Meter Readings: Your electricity meter records the amount of electricity used. Regular readings ensure accurate billing.
• Smart Meters: If you have a smart meter, it automatically sends real-time usage data to your supplier, leading to more precise bills.

Additional Charges

• Standing Charge: This is a daily fixed charge that covers the cost of maintaining the electricity supply to your home. It’s included in your bill regardless of how much electricity you use.
• VAT: Value Added Tax (VAT) at a rate of 5% is applied to domestic electricity bills in the UK.

Understanding Your Bill

• Itemised Usage: Your bill will detail the number of kWh used, the rate applied, and the period covered.
• Total Cost: This includes the total kWh multiplied by your tariff rate plus the standing charge and VAT.
• Energy Efficiency: By understanding your usage patterns, you can identify ways to reduce consumption, such as using energy-efficient appliances or shifting usage to off-peak times if on a time-of-use tariff.

Example:

Let’s say you’re on a fixed-rate tariff at 20p per kWh with a standing charge of 25p per day. If you use 300 kWh in a month:

• Usage Cost: 300 kWh * 20p = £60
• Standing Charge: 25p/day * 30 days = £7.50
• Total Before VAT: £67.50
• VAT (5%): £67.50 * 0.05 = £3.38
• Total Bill: £67.50 + £3.38 = £70.88

Electricity-only tariffs explained

When choosing an electricity-only deal, understanding the different types of tariffs available can help you find the best option for your needs. Here are the main types of electricity tariffs:

Fixed-Rate Tariffs: These tariffs lock in your electricity prices for a set period, usually 12, 18, or 24 months. They provide stability and protect you from price increases during the contract period. For example, EDF Energy offers fixed-rate plans that ensure consistent electricity costs.

Variable-Rate Tariffs: The price you pay for electricity can go up or down depending on market conditions. This type of tariff offers flexibility but comes with the risk of price increases. Octopus Energy’s Flexible Octopus tariff is a popular variable-rate option that adjusts prices based on market changes.

Time-of-Use Tariffs: These tariffs charge different rates depending on the time of day. They are ideal for households that can shift their electricity usage to off-peak times to take advantage of lower rates. Examples include Economy 7 or Economy 10 plans, which offer cheaper rates during the night.

Green Energy Tariffs: These tariffs ensure that the electricity you use is matched by purchases of renewable energy. Suppliers like Octopus Energy and Bulb offer green tariffs, allowing you to reduce your carbon footprint while enjoying competitive rates.

Prepayment Tariffs: Also known as pay-as-you-go tariffs, these require you to pay for your electricity in advance using a meter. They offer more control over your spending but can sometimes be more expensive than other options.

Why opt for an electricity-only deal

Looking for a great electricity-only deal in 2024? Top electricity suppliers like Octopus Energy and EDF Energy offer fantastic electricity-only plans with competitive electricity prices and flexible tariffs. For example, Octopus Energy’s Flexible Octopus tariff is perfect for those wanting flexibility and no exit fees, allowing you to benefit from lower electricity costs without being tied down.

These electricity-only deals are especially beneficial in the UK, where electricity prices can vary. By focusing solely on your electricity plan, you can manage your electricity costs more effectively, avoiding the extra charges that come with dual-fuel deals.