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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.

Did you know, only a third of your bill pays for the energy you use?

The diagrams below show what exactly goes into your dual fuel bill. 

There are a lot of things that need to happen once the energy has been generated to deliver it into your home.  

It’s definitely true that the price of the wholesale energy itself has been falling lately. It used to make up at least half of your bill but now it’s responsible for about a third. The other two thirds pay for the pipes and wires (networks) to deliver the energy to your home, government schemes like the Energy Company Obligation and the Warm Homes Discount as well as VAT and supplier operating costs.

Here's more detail:

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

At OVO, we review our prices on a regular basis.  Any price changes we make will always reflect any movement we see in the cost of supplying energy to your home. This ‘cost reflective’ pricing principle sits at the heart of our promise to our customers that the deal they are getting from OVO will always be fair, transparent and as competitive as possible.

 

The pay monthly electricty and gas breakdown is: 

The pay as you go electricty and gas breakdown is:

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