How does my energy use relate to my Direct Debit and bill?

Your Direct Debit will generally stay the same each month, but your bills will go up or down depending on how much energy you use.

Let’s start with a few definitions:

Your energy use is the amount of gas and/or electricity you’ve used each month. We work this out in kilowatt hours (kWh) but it’s easier to explain in terms of how much it costs. For example ‘you’ve used £30 worth of electricity and £60 of gas’. On your statements this is shown as ‘Your charges’.

Your Direct Debit payment is our estimate of what you’ll spend on your energy over a year, divided by 12 to get your monthly payment.

Your account balance is the difference between your Direct Debit payment and the amount of energy you’ve used. A credit balance means the energy you’ve used is less than your Direct Debit. A debit balance means you’ve used more than your Direct Debit.

For example, suppose we think you’ll use £1,200 worth of gas and electricity in a year. We’ll divide that by 12, so your monthly Direct Debit will be £100.

Then, each month we’ll check how much energy you’ve used.

In a summer month, when you don’t use much heating, you might only use £40 worth of energy. So:

£100 Direct Debit minus £40 charges = £60 credit in your OVO account.

However, in a winter month, you might keep the heating on all day, cook a lot of hot meals, and take long baths. Then your energy charges could be £150.

£150 charges minus £100 Direct Debit = £50 less in your OVO account.

At the end of the summer, if your charges have been lower than your Direct Debit for four or five months, you might have built up a very large credit balance.

Then, over the winter, your credit balance will shrink, and at the end of winter you might have a negative ‘debit’ balance.

Over the year, we aim for your Direct Debit payments and charges to even out, so you end up with a zero balance.

How do you work out my monthly Direct Debit payment?

When you ask us for a quote, we work out how much energy we expect you to use based on:

  • The size of your home.
  • The average amount of energy used in your area.
  • And, if we know it, how much energy you've used in the past.

Or, if you’re renewing with us, we’ll already know exactly how much energy you used last year.

We then look at how much that will cost over the year, and divide it by 12. This gives us an average monthly cost, which becomes your monthly Direct Debit amount.

How do you work out my energy charges?

We use the meter readings you send us – or, if you have smart meters, we’ll base it on the data they provide. These show us how much energy you’ve used in kilowatt hours (kWh). We multiply this by your unit rates to get your energy charges.

If you don’t send us any readings one month, and you haven’t got a smart meter, we’ll give you an ‘estimated’ bill.

What happens if the difference between my charges and my Direct Debit doesn’t even out over 12 months?

We keep an eye on your Direct Debit and, if we realise it’s too low or too high for the amount of energy you’re using, we’ll let you know that we need to change it.

If you’ve built up a lot of credit in your OVO account, you can apply for a refund in My OVO. However, if you’ve got a traditional meter, we’ll ask you to take meter readings so we can confirm your energy use. We’ll also expect you to keep at least one month's worth of Direct Debit payments in your account, as we buy your energy in advance.

If your payments have fallen well short of your energy use, you may be able to make up the difference with a one-off payment in My OVO, rather than increasing your monthly Direct Debit.

I’m on a fixed rate plan, so why isn’t my bill the same every month?

It isn’t your bill that’s fixed, it’s your unit rates. They’re what we charge you for each unit (kWh) of gas or electricity you use. 

On a fixed rate plan, your unit rates won’t change for the length of your contract (usually one year). No matter how much, or how little, energy you use, you’ll pay the same price for each unit all year, even if wholesale prices rise or fall.

Your bill is based on the amount of energy you’ve used, multiplied by your unit rates. You use different amounts of energy each month, so your bills go up and down. 

Find out about the benefits of being on a fixed rate plan.


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