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Why is my gas and electricity bill so high?

Getting a big energy bill you weren’t expecting is extremely annoying. Not only can it mess up your bank account for that month, but it can leave you scratching your head as to how you can avoid another one in the future. In this guide we are going to look at some reasons your bill might be high, and advise you on what you can do about it.



Is your bill based on accurate meter readings?

Before we dig into the numerous reasons you might be spending a lot on energy, we need to ask if your bill actually reflects how much energy you have used. Energy companies are only required to take a physical meter reading from your home every two years. And while every six months is more common, it is still very possible for you to get an inaccurate bill based on an estimate.

If you receive an unusually large bill, the first thing you should do is to check whether it’s based on actual or estimated readings. If it’s been calculated on an estimate, you should check these figures against your actual meter. If the estimate significantly exceeds what you’ve used, you can contact your energy company with up-to-date meter readings and have a more accurate bill reissued.

Overestimates are quite common when people move home, or when the weather is unseasonably warm. If your energy company has an easy way of providing meter readings, like we do here at OVO, you can largely eliminate this problem.

If your bill is accurate but you’re still unhappy with how high it is, keep reading for a bunch of potential solutions to avoid this type of bill in the future. If you’d like free impartial advice on anything from tips on energy efficiency and renewable energy to how to apply for grants and financial support just give us a call on 0800 408 6601 (mobile 0117 934 1999) to speak with an energy efficiency expert or you can email us.

Are you on an expensive tariff?

Here in the UK it’s common for homes to pay £160 too much for energy, simply because they aren’t on a competitive tariff. If (like around half the country) you’re on a standard variable tariff with a Big Six provider, then there’s a good chance you can save a significant amount by switching to a more competitive fixed-priced deal.

In the graph below, we give some examples of the types of savings that are generated when people switch to our OVO Better Energy Tariff. But remember: these are just estimates. The best way to get a clearer idea of what you might save by switching is to get a quick quote.

savings when switching to OVO Better Energy Tariff

Have you used more heating this winter?

If the big energy bill in question arrived at the end of winter, then there’s a good chance that your heating was the culprit. Space heating is responsible for two thirds of energy use and half of energy bills in UK homes. This means a typical home can easily spend £600 keeping warm in a typical winter.

If the winter is particularly harsh, this value can be even higher. In the graph below, you can see how average gas consumption jumps around (the red line) and what the trend looks like after you adjust for winter temperatures (the dotted red line). In recent years, the winter of 2010 stands out as a particularly cool one, with homes using almost 18,000 kWh of gas each.

average domestic gas and electricity consumption in the UK

In contrast to gas usage which fluctuates considerably with the weather, average electricity use has been trending down in recent times towards 4,000 kWh/year due to increasingly efficient refrigeration, lighting and televisions.

Is your home poorly insulated?

The better insulated your home is the more comfort you will get from a unit of heat. This is because when you heat your home, you’re simply replacing lost heat. You can see this idea visually in the graph below. Here, we can compare three homes with very different insulation and airtightness levels.

heat gains and losses by house type

The super-insulated Passive House (Passivehaus) requires just 15 kWh/m2a of heating energy, while a modern home requires ten times this; a leaky Victorian home needs 20 times more energy. In terms of gas heating in an average-sized UK home, this is equivalent to roughly £50, £500 and £1,000 heating bills per year respectively.

Now, while we may not all be able to afford Passive House standards of insulation, we can try to upgrade our own homes. The most cost effective measures tend to be loft insulation, draught proofing and cavity wall insulation.

Are you heating with an expensive fuel?

The vast majority of heating in the UK uses natural gas (over 80%). Using gas as a heating source is relatively cheap, particularly if you have a modern condensing boiler. If you happen to be stuck using electricity for heating (without a heat pump) this can be extortionate.

To give you an example of just how expensive electricity is, we’ve graphed the cost of a unit of heat energy produced by different systems.

Energy cost comparison for heat: p/kWhth

Using average-priced grid electricity to heat your home costs more than three times as much as using gas central heating. Even if you use storage heaters and off peak pricing it will be more than twice as much.

If you are off the gas grid, you need to think through your heating options carefully. Oil prices have come down recently and are again a reasonable option, but the upfront cost of changing system is also an option.

Is your heating system sensibly programmed?

For people in rental accommodation or for those who don’t have the cash to spend on improvements, there is often little that can be done to change a home’s insulation standards or heating system. If you can’t alter these things but are still looking at an excessive heating bill, you need to be clever with your heating controls.

The first thing to consider is how high you set your thermostat. According to the Energy Saving Trust, turning down the thermostat by just one degree centigrade can save the typical home around £90 a year. How far down should you turn it? As a general rule going below 18°C isn’t comfortable, and below 16°C is unhealthy.

In the graph below we can see that the most common setting in the UK is in fact 20°C, which for living spaces is a good rough guide.

thermostat set-points for centrally heated dewllings

Beyond your thermostat setting you also want to consider the timing of your heating, and how your rooms are zoned for heating. You only need to be warm when you are using them, so don’t waste heating energy when you’re asleep, out of the house or not using that space.

Have you bought any new gadgets lately?

Although heating energy is one of the most common causes of oversized bills, they can also result from high electricity use. If you have recently bought some new electrical items these may be the cause.  The classics to look out for are dimplex heaters and tumble driers, although in recent years, gadgets have also become big energy users. You can now use our electricity cost calculator to work out how much it costs for the electricity to run various household appliances.

The graph below compares the total electricity consumption of different appliance types over the last few decades. What you can see looking at the lines is that efficiency improvements in new lights, TVs and refrigeration mean we are now using less electricity on these activities. In contrast, the figure for ‘consumer electronics’ has shot up in recent years.

electricity consumption by household appliance type in the UK

Things to look out for include set top boxes, gaming consoles, desktop computers and mechanical devices. Don’t worry too much about portable devices (phones, ipads and laptops) as these invariably use very little energy due to the limitations of batteries.

Is your bill big compared to similar homes?

People usually have no idea if their bill is high compared to a similar home. If you're curious take a look at this graph below and see how you stack up.

Typical energy bill by housesize (£/year)

For more information, check out our piece on what’s happened to average gas and electric bills over the last decade.

Checking your bills are in order

Here’s a simple checklist to keep your bills on track:

  1. Ensure your meter readings are accurate
  2. Check you’re on a competitive tariff
  3. Take control of your heating system
  4. Choose a cheap heating fuel
  5. Watch out for big electricity demands


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Please see below for full terms and conditions on 33% renewable electricity, 3% interest rewards, exit fees and saving claims.

 

1Monthly cost - Representative monthly direct debit costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas) paying in advance by direct debit, including online discount.  All rates correct as of 23/08/16, but may go up or down.

2Weekly cost - Representative weekly costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas).  All rates correct as of 23/08/16, but may go up or down.

3Pay Monthly Savings are based on the average estimated annual costs for new PAYM OVO customers quoted through the OVO website (based on household and/or consumption information provided by those customers), compared to their current supplier and tariff. Comparisons taken between 01/01/2016 and 11/10/16. Incl VAT. Actual savings may vary according to your current supplier or tariff, individual tariff options, household information, consumption and location.

4Pay As You Go Savings are based on the average estimated annual costs for new PAYG OVO customers quoted through the OVO website (based on household and/or consumption information provided by those customers), compared to their current supplier and tariff. Comparisons taken between 01/01/2016 and 11/10/16. Incl VAT. Actual savings may vary according to your current supplier or tariff, individual tariff options, household information, consumption and location. 

We include almost twice as much renewable electricity as the national average: At least 33% of electricity in all of our tariffs comes from renewable sources. The national average, according to Ofgem as at March 2014 was 16.7%. For more information please visit this page.

33% of your electricity comes from renewable sources: 33% renewable electricity as standard as of 1st April 2015. Renewable electricity is generated from wind, solar, geothermal, wave, tidal, hydro, biomass, landfill gas, sewage treatment plant gas and biogas.

3% interest: Calculated at 3% per year, paid monthly based on number of days in credit and the amount left in your account after you’ve paid your bill. OVO Interest Reward is capped at 12 times the amount of the current direct debit amount and is available to customers paying by advance direct debit. Terms apply: http://www.ovoenergy.com/terms/

95% of new customers save when switching to OVO: Based on all new customer signups between 01/02/2016 and 31/07/2016

94% of surveyed customers would recommend us: OVO conducted a survey of their customers in between 1st January 2016 and 15th April 2016. Out of 15,312 customers who responded, over 94% rated OVO 6+ when asked 'how likely would you be to recommend us to a friend and family, on a scale of 1 to 10.

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