What You Should Know About Electricity Rates in the UK
Electricity rates are subject to change frequently and business owners need to review their electrical usage regularly to determine if they are using more electricity than necessary. Electricity prices can fluctuate rapidly from state to state, and even from county to county. Even within states, there can be substantial differences in rates for utilities like gas and electricity. To keep your costs under control and increase your profit margin, you need to use your utility company’s rate structure to your advantage.
Be informed about the energy plan for your county
or city and familiarize yourself with its reliability. Remember, if your energy use is high, it means that your electrical consumption will also be high. There are three common formats available for consumers to use to compare energy providers and their electricity rates. These include the Energy Performance Certificate (EPC), the tariff rate format, and the NEMO rating format. Each format has advantages and disadvantages, and it is best to research each before you decide on residential electricity rates.
EPCs are designed to provide financial incentives
to energy suppliers for meeting certain emissions and efficiency targets. For every megawatt-hour (MWh) of electricity used, the provider may pay a varying amount based on whether the energy suppliers qualifying for the incentive. Incentives are usually based upon the number of years the incentive will take to fully repay. The rate payable may also be determined by the size of the energy supplier’s fleet, which may pay higher rates per MWh of used energy. If the energy suppliers are unable to secure competitive rates on the EPC, they are prohibited from applying for incentive payments.
Tariff rates are based upon wholesale prices
and are typically updated monthly to account for inflation and market conditions. This information allows customers to find the cheapest rates and to select energy suppliers that offer the lowest tariffs. However, while energy suppliers can charge the lowest prices, this does not necessarily mean that the tariffs are the cheapest available. A lack of competition between energy suppliers and fluctuating retail and wholesale pricing trends can reduce the reliability of the wholesale pricing trends and allow companies to charge the most expensive tariffs available without making any effort to find the cheapest rates for renewable energy users.
One important consideration
when comparing energy suppliers is the level of service that they offer. Good energy suppliers should have a variety of energy plans that meet customers’ needs. Energy providers that only offer one or two energy plans may end up having difficulty attracting and retaining customers. Additionally, energy suppliers that have a range of residential and commercial energy plans that consumers can choose from can provide significant cost savings. While it is true that everyone wants the cheapest rates, choosing a supplier who provides a large range of energy options, along with competitive EPCs and low rates, can be more beneficial to consumers. Choosing a supplier with several residential and commercial energy plans that vary according to usage rates, as well as competitive EPCs, maybe better than choosing a supplier with one large domestic energy plan that has fixed prices that won’t change.
Other factors that affect electricity rates
include the deregulated pricing structure of the UK energy markets, the different tariff structures adopted by local utility companies, the availability and cost of renewable energy and gas. Consumers must understand all the facts about the energy tariffs available to them, including how deregulated pricing impacts their daily electricity use and how different tariff structures affect the prices of some energy plans. These factors are important for any person who is currently considering purchasing a domestic or commercial electricity plan. Understanding deregulated energy plans and knowing which tariff structure best suits you can help you save hundreds of pounds per year, which can make a significant difference to the quality of life that you and your family enjoy.