The Mystery of Energy Prices – Paying more for less

- by Becky Hall
How Much Does It Cost To Fix Home Appliances? – Chapter Five

Energy prices affect us all because we all depend on electricity. But sometimes we feel like we have no control over the amount we pay on electricity bills. In fact, the amount we spend on electricity has risen, even though we actually use less electricity.

While we can’t always control the price of energy, we can at least understand where our electricity is being used and what we can do to cut the amount of electricity we use. Besides for helping to reduce your carbon footprint, understanding how to save energy in your house will save you a pretty penny and make you a wiser and better consumer.

Energy Prices

Are Electricity Prices Going Up?

Figures for 2012 show that a typical UK family household spends an average of £106 each month on energy bills. This is a 55% increase from 2002 where the average expenditure on electricity was £69. However, if we look at the amount of electricity that we actually use, this figure has decreased since 2002. The table below shows the energy consumption in the UK from 1970 to 2015.

energy prices in the uk- cashfloat

So why has energy consumption decreased yet expenditure on energy has increased?

The reduction in the amount of energy we use is down to several factors including better insulation in homes, more efficient appliances and awareness of the environmental impact of using large amounts of energy.

The increase in how much money we spend on energy however, is due rising energy prices. The graph below shows the price of electricity from 1970-2015.

energy prices in the UK - cashfloat

Lots of the energy we use comes from imported oil, international and political factors lead to increased demand and decreased supply driving up the energy prices. We can see a continual increase in energy prices. So we end up paying more even though we use less energy.

While this is a fact that we are living with, how are we going to cope in the long run? Will we continue paying more and more for our energy? Or will we find ways to reduce the amount of energy we use further, so that our total expenditure on energy does not increase out of control?

Electricity Usage Compared

Electricity Consumption By Country

CountryAverage Household Electricity Consumption
Global Average3,500kWh

Although the UK uses far less electricity per household than the USA, we still use more that the global average.

Electricity Consumption by Houshold Type

energy prices in the uk- cashfloat

How to Reduce Energy Consumption in your Home

Saving energy is good for everyone. Besides for cutting your electricity bill, energy conservation helps the environment. One way to achieve this is to buy energy efficient appliances. No one is suggesting that you throw away your perfectly good appliances, but when one goes wrong and is not worth repairing it is a good idea to consider an energy efficient replacement.

Switch Energy Suppliers

If you have always used the same energy supplier, then a first step to saving money is to look for a cheaper alternative. Consumers who change energy providers can save as much as £350 per year on energy costs. Look on the Internet or ring a consumer helpline for advice on switching your energy supplier.

Use an Energy Monitor

One of the simplest ways to learn about how much energy each appliance uses is to invest in an energy monitor. This is a simple device that estimates how each different appliance affects your electricity bill. The monitor consists of three parts; a hand-held display, a sensor and a transmitter. An energy monitor shows you the electricity consumption for an appliance and is different to a smart meter. An energy monitor costs around £30, but some energy suppliers will provide them for free. They can be used to track the amount of power an individual appliance uses. You can also use them to set a limit of power for one day. You will receive an alert when you pass that limit. The sensor on the monitor is attached to the meter box, and the transmitter forwards the results to the hand-held device. So, if you want to measure how much electricity a washing machine uses, you just attach the monitor and switch on the washer. The display shows the amount of power used. Having one of these useful devices can point you in the right direction towards saving money on energy consumption in the home.

Buy Energy Efficient Appliances

When you are looking for a new appliance, it is always a good plan to consider the running costs and not just look at the headline price. Tumble dryers are a good example where energy efficiency impacts your electricity bill. Some dryers cost only around £40 per year to run while others cost up to £140 per year. Just as energy saving light bulbs save you small amounts each day, energy efficient appliances can soon cut into a large annual energy bill. Even small amounts saved each day make a difference.

energy prices - cashfloat

How to Reduce your Energy Bills

The first step to reducing your electricity bill is to understand where your electricity is going. Some appliances guzzle up electricity, while other slowly, yet persistently cut into your bill. We have listed the average energy consumption of your home appliances, plus we tell you what your appliances can do with one unit of electricity.

Which Appliances Use The Most Energy?

ApplianceCost to Run1 Unit Of Electricity Produces
Washing Machine50p for a 1hr wash25 minutes of washing
Fridge/Freezer30p per dayPower for 0.5-1 day
Iron10-20p per day1-2 hours of ironing
PC6-7p per hour3 hours of work
Games Console6-7p per hour3 hours of play
Kettle2.5p to boil full kettleBoil 12 pints of water
TV2p per hour10 hours of watching
Light bulb0.5p per hour40 hours of light

But there are some important points that you must consider when using this table. Some home appliances use more energy than others, especially if you have installed energy efficient appliances. Also keep in mind that some appliances run constantly, so although they may be cheap to run per hour, in the long run they use more lectricity than other appliances. The information below shows how much appliances are the most and least expensive to run. Use this information to help you to change your energy use habits which in turn will save you money.

energy prices - low energy appliances - cashfloat

Surprisingly enough a washing machine is one of the appliances that uses the least amount of energy. Along with microwaves and gas ovens, these cost from around £12 per year to run.

You can help to save more money by choosing the most energy efficient appliances which will have an ‘A++’ rating and although these may cost more up front, in the long run it will save you money on expensive energy bills.

energy prices - high energy appliances - cashfloat

The household appliances which use the most amount of energy are fridge freezers, tumble dryers and electric hobs. Average costs per year work out at between £30 and £40.

Fridge freezers run constantly so they use lots of electricity. But, your tumble dryer does not have to run constantly. Using your tumble dryer only in the winter and drying clothes outside in the summer will save on electricity and money.

A comparison between a fridge freezer with an ‘A++’ rating and one with a ‘G’ rating shows that the running costs are some £50 per annum different.

Is Electricity Cheaper at Night?

The cost of electricity does not depend when you use it, unless you are on and Economy 7 prices - cashfloat If you are on an Economy 7 tarriff, you can save money by using electricity at night. The price of electricity during the day is the same if you are on an Economy 7 tarriff or if you are on a regular tarriff. However, during the night, Economy 7 tarriffs can cost up to 50% less than a regular tarriff. Economy 7 allows you 7 hours a night of cheaper electricity.

There is another tarriff called Economy 10, which, like its name suggests, allows you 10 hours of cheaper electricity a night

To switch to Economy 7 or Economy 10 and get cheaper electricity at night, speak to your energy supplier.

7 ways to cut your electricity bill

Here are some of the easiest ways to save on your utility bills. With minimal effort you can really start to see a difference in the overall expenditure on energy

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About The Author
Becky Hall
Becky never thought she would be a financial blogger. But Fate arranged that Becky had to put her accounting degree on the back burner right after she graduated with a first in Business and Accounting. While doing bookkeeping as a freelancer for private clients, Becky noticed how many cashflow problems can be solved with a little bit of education. Trying to keep her clients out of debt, Becky began writing resources which she distributed to clients. What began as writing advice for clients evolved into a passion and now Becky found her platform at Cashfloat. When she isn’t writing, calculating or budgeting, Becky can be found at her piano playing something classical.
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