Working out your electricity costs
This month is all about how to work out your electricity costs, and how to discover the appliances that can cost you the most by borrowing some home energy monitors.
What you pay for your electricity will depend on the supplier you are with, and which tariff you are on with that supplier. A tariff is simply the way an energy provider bundles together the costs that you will pay. There can often be many different tariffs from the same supplier that may seem confusing, but they are really designed to suit the different needs of a customer. For example, if you have a big family, you might want a tariff that offers a lower daytime rate. Or, a tariff that has a cheaper night-time rate might suit you better because that is when your heating comes on.
Understanding how much electricity you use, and when you use it will help you make decisions that can reduce your bills
There are two parts to your electricity bill: –
1 – Standing Charge
The standing charge is a fixed daily charge and is the same everyday regardless of how much electricity you use.
The standing charge is designed to cover the cost of keeping you connected to the electricity supply, network maintenance, to fund some discount schemes, and to cover the cost of rescuing customers from failed energy companies known as the ‘supplier of last resort’.
While the focus has been on rising electricity costs the standing charge rate has also been increased significantly by suppliers due to inflation to cover the increasing cost of wages and materials, and to support the supplier of last resort scheme.
As mentioned, the standing charge is a fixed daily rate. As long as you are a customer of an energy supplier you will pay the charge even if you didn’t use any electricity at all. The only way to change the amount you pay is to change your tariff or supplier. Generally, tariffs with a lower standing charge cost will charge more per unit of energy you use, tariffs with a higher standing charge will charge you less per unit. Depending on your circumstances it may make sense to change your tariff if you are currently on one that does not suit your particular needs.
2 – Energy Use
The next, and usually main part of your bill is the cost per unit of energy. For electricity this will be shown as pence per kWh. kWh stands for kilowatt hour and is how much electricity you use in one hour.
Depending on your tariff you may pay a single rate for all your electricity, or you may pay different rates at different time such as an Economy 10 tariff where you get 10 hours of cheaper electricity per day. These different rates may be called the standard or normal rate and off-peak rate.
It is important to know what you pay for your electricity, and you will find the rates you pay from your energy bill.
For example, a single rate tariff might have a unit cost of 30.24p per kWh. This is the rate you will pay for every unit of electricity you use, and you can work out how much you use by reading your meter.
How to work out your costs
To work out how much you pay for a typical day take a meter reading at the same time a day apart. Take the smaller number away from the larger number to give you how many units you have used during that time.
Now multiple that number by the kWh cost to give you the cost of the electricity you have used. Finally add the standing charge to give you an accurate cost for that day’s electricity. Here is an example: –
Monday reading at 9am = 70452
Tuesday reading at 9am = 70490
70490 – 70452 = 38 kWh of electricity used
38 x 30.24p per kWh = £11.49 of electricity used
Finally add the standing charge to give the total
£11.49 + 50.14p (example) = £11.99 for the day
You can then multiple the daily rate by 30 to give you a monthly estimate, or by 365 to give you a yearly estimate.
£11.99 x 30 = £ 359.70
£11.99 x 365 = £ 4,376.35
It will only be an estimate based on the amount of electricity you used on the particular day you took the meter reading. Take regular readings to give you a better understanding of your use and calculate a better estimate.
If you would like help understanding your bills, please pop into Heilsa Fjold with a copy of your bill and we will help you work it all out and check to see if you can save money. Contact the CDO or Wellbeing Coordinator for help with any bills, forms, or letters that you do not fully understand.
We can also loan a home energy monitor and plug-in appliance monitors to quickly help you understand you costs and in particular the cost of an individual appliance such as a kettle, heater or microwave. You will then understand how much it costs to use those appliances and make better choices on when to use them.
Get in touch if you would like to borrow a whole home monitor and 2 individual appliance monitors for 2 weeks (like those shown below). We will help you get setup and show you how to use them.