Energy bill breakdown

What makes up my monthly energy bill?

Your monthly bill doesn’t just cover the energy you’ve used, but network and metering costs, social and environmental obligations as well as supplier overheads and VAT. In fact, only a third of your bill actually pays for the energy you use.

Here’s an OVO energy bill breakdown for a dual fuel customer: 

• Wholesale costs – 38%
• Network costs – 26%
• Environmental & social costs – 13%
• Metering costs – 6%
• Suppliers overheads and margin – 12%
• VAT – 5%

Here’s an OVO energy bill breakdown for electricity-only customer: 

• Wholesale costs – 32%
• Network costs – 26%
• Environmental & social costs – 22%
• Metering costs – 4%
• Suppliers overheads and margin – 11%
• VAT – 5%

Figures correct as of 01/10/2017 based on a medium user in a typical household using 12,500 kWh of gas and 3,100 kWh of electricity.

What do all those things actually mean?

This should explain everything...

Wholesale energy costs: this is what we pay for the energy we deliver to your home. We buy it from gas producers and electricity generators on the wholesale market. Prices vary and can go up and down very quickly depending on what’s happening around the world with base fuels such as gas, oil or coal.   

Network costs: the pipes (gas) and wires (electricity) that deliver the energy to your home. We have to pay a regulated fee to the companies that own them for every bit of energy our customers use. This money goes towards maintaining this huge and intricate energy network. In fact, if you stretched all the pipes and wires out it could reach to the moon and back.

Social and environmental obligations: just like all of the bigger suppliers, we have to help pay for government energy policies. These include the support mechanism for low-carbon technology and some of the schemes we help administer that support vulnerable customers or improve energy efficiency in homes around the UK.

Metering costs: this covers the cost of installing and maintaining your actual meter in the home.
Supplier overhead and margin: this is the part of the bill that goes towards customer service and running an energy company. We’re committed to keeping this part of your bill as low as possible.

VAT: this is a set fee of 5% on all domestic energy bills