Lowering bills, cutting carbon
15 Oct 2020
One of the aspects of switching we get asked about most often is estimated annual energy consumption. In this article, we look at what it is, why we need it and most importantly, where you can find it.
Quite simply, it’s a best guess as how much energy you use over a 12 month period. It’s normally expressed in kilowatt hours (kWh for short).
We use your estimated consumption in two ways.
First, it allows us to estimate how much each of our tariffs will cost you over a whole year. We can then compare this with the price you’ll pay for the same amount of energy if you do nothing, and stay with your current provider. For more on how we calculate your quote, see here.
Second, if you pay by direct debit, the estimate will be used by your new supplier to set the level of your payments to them. That’s why it’s best to use accurate figures if you have them, to ensure your new supplier doesn’t need to adjust your direct debits up or down once you’ve joined them to account for higher or lower than expected energy use.
We ask for your energy consumption over 12 months because your energy use will vary throughout the year. In general, we use much more energy in the winter than we do in the summer. Using your energy use for a single month is therefore likely to over- or underestimate how much you use.
Yes… and no. If you’re paying by direct debit, then it’s possible to use your monthly direct debit payments when getting your quote. We’ll take the information you give us about your tariff to estimate how much energy you use in kilowatt hours.
Here’s the ‘but’: if you have both gas and electricity, you need to know how much you pay each month for them separately. i.e. you need to know how much you pay for gas, and how much you pay for electricity.
Here’s how it works…
First, we multiply your monthly direct debit by 12, to work out how much you spend over a year. e.g….
Then, we look at the standing charge from the tariff you’ve told us you’re on. This is an amount you pay per day, so we multiply it by 365 to find out how much you’ll be paying over a year.*
Next, we subtract this from the total amount you’ll spend over the year. This leaves us with the part of your bill accounted for by the unit rate (how much you pay per unit of energy).
Finally, we divide that figure by the unit rate for the tariff you’ve told us you’re on, to work out how many units of energy your supplier thinks you use each year.
If you only know a single direct debit figure for both gas and electricity combined, we won’t know how much of it is accounted for by each fuel. And because the unit rates are so different for gas and electricity, guessing could mean we get it really wrong – and we don’t want to do that!
The good news is, all suppliers have to provide you with an estimate of how much energy you use, in kilowatt hours, on every bill. The good suppliers make this really easy to find – here’s an example from a So Energy bill.
With other suppliers, finding the number can be harder. It may sometimes be labelled as a ‘personal projection’, but rest assured, it will be there – take your time and hunt it down!
If you’ve got an online account, then your supplier still has to provide you with regular bills or statements. There should be a section of your online account where you can download these – usually as a PDF.
There isn’t really any such thing as a ‘normal’ level of consumption – every household is different. But, to give you a rough idea, the energy regulator (Ofgem) has identified three broad household types (low, medium and high energy users) and provided guideline consumption levels for each.
|Fuel||Household type||Annual use (kWh)|
|Electricity (standard meter)||Low||1,800|
|Electricity (Economy 7 meter)||Low||2,400|
There are some circumstances in which you just won’t know your annual energy consumption. If you’ve only just moved into a new home for example, you’ll have no way of knowing how much energy you’ll use.
If that’s the case, it shouldn’t stop you switching, but you’ll need to be prepared for your new supplier to adjust your direct debits up or down if it turns out you use more or less energy than expected. In the meantime, just select ‘Don’t know’ on our switch form, and then choose either ‘low’, ‘medium’ or ‘high’ (these choices are linked to the Ofgem typical consumption values above).
If you’re still finding the whole thing a bit of a puzzle, just ask. Our friendly team is here to help – just use our live chat, email us or give us a ring on 0800 249 4770.
* If you’re on a fixed rate deal that ends within the next 12 months, we’ll do two calculations – one for the number of days you have remaining on your current tariff, and one for the remaining days assuming you’ll drop onto your supplier’s ‘default’ tariff. For more on this, see here.