Customer loyalty rewards are a lovely thing, but you don’t tend to find them very often in the energy industry.
People in the UK can find themselves overpaying for their home’s gas and electricity, simply because they’ve never considered their options. According to a Daily Telegraph report in April 2020, 53% of the UK’s energy customers are on expensive default tariffs, and 49% have never switched suppliers.
Meanwhile, the popularity of renewable energy in the UK is skyrocketing, which means homeowners across the country are increasingly looking to switch to greener tariffs.
On this page, we’ll tell you everything you need to know about green tariffs and energy switching, including how much you could save, and what to watch out for.
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What is energy switching?
‘Energy switching’ is when a household starts buying its gas and/or electricity from a different supplier. It’s usually a seamless process, and there’s no temporary pause in your energy supply.
Crucially, no energy company is capable of offering a unique product in terms of what a household experiences. Electricity is electricity, and gas is gas. The only ways an energy firm can differentiate its product from everyone else’s is a) to make it cheaper, and b) to make it greener. Of course, the quality of customer service also plays a part.
Households who switch energy suppliers are simply trying to decrease their energy bills, or reduce their carbon footprint, or find better customer service – or all of the above.
What actually happens when you switch to a greener supplier?
If you switch to a greener energy supplier, your house won’t start receiving different energy. Every house in your neighbourhood receives exactly the same gas and electricity from the grid. The only way to use pure, renewable energy at home is via a direct line to a generator, such as a solar PV system or a wind turbine.
The vast majority of energy that’s generated in the UK is all mixed together in the National Grid. That means energy from solar farms, wind turbines, nuclear power plants, hydroelectric dams, fossil fuels etc. all pools together in the National Grid.
Scientists haven’t quite yet figured out how to separate the renewably sourced electrons from the non-renewably sourced ones, so it all mixes together like a big energy stew.
It’s then dished out and sent via power lines to every household in the UK.
So, until the National Grid is powered by 100% renewable sources, your household’s energy supply will always have a mixture of clean energy and ‘dirty’ energy. However, we might not be waiting too long – renewables made up a record 40% of the UK’s “energy mix” in Q3 of 2019.
When you opt for a green energy tariff, you’re improving the energy mix of the National Grid (at least, in theory – more on that later), but you’re not necessarily using cleaner energy at home.
What are green energy tariffs?
‘Green energy’ is energy created from renewable sources (i.e. sources that don’t run out) via processes that have a minimal negative impact on the environment.
There are lots of ways to produce renewable electricity, such as wind power, solar power, hydroelectric power, tidal power, geothermal power, and biofuels. Meanwhile, the only way to produce renewable gas is anaerobic digestion (i.e. decaying organic matter),
However, the definition of a ‘green energy tariff’ is a little less simple. Sometimes this can mean that you’re buying 100% renewable electricity and gas, but other times it can be a little shady.
A good green energy tariff
If your supplier is a responsible, truth-telling organisation, their ‘green tariff’ means they’ll buy an amount of renewable energy that’s equal to the amount of electricity you use. They’re essentially ‘matching’ your energy usage with an equivalent quantity of green energy, and sending this to the National Grid.
So, by choosing a green tariff, you’re increasing the UK’s demand for renewable alternatives, and you’re gradually improving the National Grid’s energy mix.
Most suppliers also include nuclear energy as part of their ‘green energy purchasing’, but some don’t. Every supplier has a responsibility to tell you the composition of their own energy mix, i.e. what % of their renewable energy purchasing is solar, what % is wind, and so on.
A bad green energy tariff (‘greenwashing’)
On the other hand, there are energy suppliers whose ‘green energy tariff’ is not all it’s cracked up to be. That’s because the renewable energy market isn’t too difficult to manipulate.
Every time a clean energy generator (e.g. solar farm, wind farm etc.) creates 1 megawatt-hour (MWh) of renewable electricity, Ofgem issues a certificate called a Renewable Energy Guarantees Origin (REGO). These energy generators then sell the 1 MWh of electricity and the REGO certificate as two separate products.
Unfortunately, some energy companies (especially the larger ones) often buy renewable electricity from generators without the accompanying certificate, because obviously this is cheaper, and they’re not bothered about proving exactly where their electricity is from.
This leaves unsold REGO certificates available for purchase by smaller energy companies. They can buy these certificates and pretend that they’re sending clean electricity to the grid, when in reality they’re just sending the dirty stuff. This purchasing of REGO certificates to mask non-renewable electricity is known as ‘greenwashing’.
As you can probably tell, the responsible thing for any energy company to do is to buy the renewable energy with the REGO certificate. This provides proof of where their energy is coming from, and it stops other companies being able to greenwash their brown power.
Are green energy suppliers more expensive?
Green energy used to be the pricier option, but things have changed.
A couple of years ago, the Guardian reported that green energy tariffs were “no longer an expensive luxury”, with uSwitch stating that green deals accounted for 50% of the cheapest 10 tariffs in the UK.
In August 2018, there were 57 green tariffs available in the UK. By September 2019, there were more than 100. As demand for green tariffs continues to grow, the number available will rise, and their cost will fall.
However, the greenest of green energy tariffs are still the most expensive on the market. If an energy supplier is creating its own renewable electricity (as opposed to just buying it from other generators), and this makes up 100% of its supply, and it’s even producing some of its own biogas, then its prices are allowed to exceed the Ofgem energy price cap.
Why? Well, these genuinely green energy suppliers are providing much more substantial support to the renewables industry than companies who just buy from green generators. Additionally, the cost of directly generating renewable energy is more expensive than buying non-renewable energy, so these suppliers need a way of transferring these costs onto the consumer.
Currently, there are three green energy suppliers in the UK permitted to charge rates above the Ofgem price cap: Ecotricity, Green Energy, and Good Energy. If you’re buying energy from any of these three, you’ll be paying a premium, but you’ll also know that you’re funding the proper stuff.
What’s the current energy price cap in the UK?
Ofgem has imposed two price caps on all UK energy suppliers, with one cap for standard variable rate tariffs (or default tariffs), and one cap for prepayment tariffs.
From April 2020 to September 2020, the variable rate tariff cap is £1,162 per year, and the prepayment tariff cap is £1,200 per year. However, there is no cap for fixed rate tariffs.
Different types of energy tariff
When it comes to shopping around for the best energy tariff for your household, you’ll find that you have rather a lot of options. Here’s a quick breakdown of the most common types of energy tariff.
Dual fuel tariffs
Let’s start off simple. Don’t let the jazzy rhyme mislead you – this tariff is quite simply about whether you’re paying the same supplier for gas and electricity. Some households get their gas and electricity from two separate suppliers (as this can often work out cheaper), but other households find it easier to have one bill for everything.
Variable rate tariffs
This is the most common type of energy tariff, with approximately 60% of UK households on one of these. Conveniently, they’re also the most expensive type of tariff on the market.
They’re ‘variable rate’ because your energy supplier can change their prices whenever they want (according to market fluctuations), although the Ofgem price cap ensures that they don’t go over a certain amount (currently £1,162 per year).
The main benefit of a variable rate tariff is that there is rarely any binding contract, so you can switch energy supplier whenever you want, with no exit fees.
Fixed rate tariffs
On the other end of the spectrum, you have fixed rate tariffs. This is where you agree on a fixed fee with your energy supplier for the duration of a contract, normally one or two years. This is usually cheaper than a standard variable rate tariff, and your supplier cannot change their prices during the time period.
However, abandoning the contract to switch energy suppliers is less easy, as you’ll most likely have to pay an exit fee. For dual fuel customers, this can be as much as £60. Fortunately, once you’re within 49 days of your contract end date, exit fees no longer apply.
Think of this like a pay-as-you-go mobile phone. You have to top up your meter with credit in order to use electricity or gas, so it helps you to manage exactly how much you’re spending on energy. Around 16% of households in the UK have prepayment tariffs.
However, they’re not great. Research by Which? found that people with a prepayment tariff are more likely to experience issues with their meter, and with the billing process.
Plus, prepayment tariffs tend to prevent households from accessing the cheapest energy deals, which are usually only for people with standard meters, and for people who pay via direct debit.
Fortunately, switching from a prepayment meter to a standard meter is not as difficult as it once was. The Big Six energy suppliers no longer charge households for switching, and smaller suppliers are gradually following suit.
If you currently have a prepayment tariff, it’s a sensible idea to switch – or at least ask your landlord about the possibility.
Economy 7/10 tariffs
A more accurate name for this tariff would be ‘economy night/day’. Quite simply, you pay one rate for the energy you use in the day, and a cheaper rate for the energy you use in the night. The ‘7/10’ part comes from the number of hours during the night that your cheaper rate applies, which is typically either 7 hours or 10 hours.
If you tend to run all your major appliances (e.g. dishwasher, washing machine, dryer etc.) during the night, then an Economy 7/10 tariff might be a good idea.
This one feels rather well covered by now. Energy suppliers offering green tariffs will match your energy usage with equivalent purchases of green energy from generators around the UK (e.g. solar farms and wind farms). A small group of elite green energy suppliers don’t even buy other people’s green energy – they produce their own.
How much money can you save by energy switching?
By using the services of Switchd, you could make significant savings on your energy bills. On average, people using Switchd’s free plan save £108 per year, while paying members save more than £400 per year.
According to MoneySuperMarket, households on a standard variable tariff could save more than £280 a year by switching to a fixed tariff.
Meanwhile, CompareTheMarket (the meerkat one) reckon that 50% of people in the UK could save up to £345 on dual fuel energy costs by switching suppliers.
As you can see, estimates vary, but the point is clear: you’ll save a few hundred quid each year.
How to switch energy suppliers
This is about as easily said as it is done.
Energy switching sites like Switchd do almost all of the leg work – all you need to do is fill in a quick form. It helps to have one of your own energy bills handy, but even this isn’t essential, as they can use a bit of common sense to estimate what you’re paying currently.
Whenever you’re presented with a better deal, you just have to choose whether to make the switch. Plus, you can even turn on auto-switching, so the site just makes the switch for you whenever something matches all of your criteria.
How long does it take to switch energy suppliers?
Once you’ve picked a new energy supplier, in most cases, the switch won’t take any longer than 21 days. That’s because the vast majority of energy suppliers in the UK are now part of the Energy Switch Guarantee, which mandates a maximum switching period of 21 days.
This 21-day period also includes a 14-day ‘cooling off’ window, during which you’re allowed to change your mind. The 14 days start the moment you agree to a new contract (whether that’s online, on the phone, or face-to-face).
Will there be any interruption in my gas or electricity supply?
Nope! As we explained earlier, you’ll still be getting the same electricity and gas through the same wires and pipes, and this won’t stop during the switch. All that changes is the company you’re paying.
Can you switch if you have debts to pay?
It depends on how long you’ve been in debt to your current supplier. If it’s been fewer than 28 days, you’re free to switch, and your previous supplier will add your debt to your final bill. However, if it’s been more than 28 days, you can’t switch suppliers until you’ve paid it off.
Fortunately, under the UK’s Debt Assignment Protocol (DAP), if you’re on a prepayment meter and you owe no more than £500 for electricity and no more than £500 for gas, you are free to switch energy suppliers. The debt is simply transferred to the new supplier, and you’ll owe the money to them instead. The 28-day rule only applies to households that are not on prepayment meters.
How can I trust a new energy supplier?
It’s common for consumers to feel unsure about the security of a newer, cheaper supplier, particularly if they feel like they can rely on their current supplier.
However, you can take some comfort in the fact that Ofgem has you protected. If a supplier goes bust, all of its customers will be transferred to another supplier without a pause in their household’s gas or electricity.
Plus, you can also investigate your new supplier on customer review websites such as Trustpilot.
Can you switch suppliers if you’re renting?
It depends on whether you pay for your energy directly. If your landlord deals with your property’s energy bills and then charges you afterwards, you’ll have to speak to them about switching energy providers.
On the other hand, if you’re a tenant who pays for your energy directly, you have the right to switch suppliers. You may find that your landlord has detailed a ‘preferred supplier’ in your lease agreement, but this doesn’t mean you’re obliged to use this supplier.
Tenants! If you don’t have a smart meter, beware of switching to a tariff that requires you to have one. If this is the case, you’ll need to get the ‘ok’ from your landlord before having a smart meter installed.
Can you switch suppliers if you have solar panels?
Yes. Even in the sunniest pockets of the UK, homeowners with solar panels still require some electricity (and, of course, gas) from the grid. If you own solar panels, this doesn’t prohibit you from switching energy suppliers.
Crucially, if you’re receiving Smart Export Guarantee (SEG) income from a particular energy company, this doesn’t have to be the same company you buy your own energy from. You’re also allowed to change your SEG licensee, so if you’ve found a new supplier that you’d like to buy energy from and receive SEG payments from, you’re free to do this.
Our favourite energy switching companies
Here’s our top four energy switching companies currently on the market.
Switchd: good for green tariffs
By taking the ‘e’ out of ‘switched’, Switchd has shown that it doesn’t waste any time on unnecessary stuff. The Soho-based energy switcher has an extremely easy-to-use website, and provides splendid clarity about the options on offer.
Essentially, there are four different types of plan, including one free option, and then three paid tiers (£1.99, £3.49, and £4.99 per month). Switchd promises to check more than 26,000 tariffs every day to see if they can find you a better deal. If it finds something for you, it will automatically switch you over (although you’ll have the opportunity to cancel the switch, should it not take your fancy).
What’s more, you can tailor your preferences so that Switchd only finds suppliers that match your criteria. Only interested in green tariffs? No bother – just tick the ‘green tariffs’ box.
On average, Switchd members change their energy supplier every 6-9 months, and save more than £400 per year. Click here to see how Switchd can help you.
Migrate: good for charitable giving
It’s a slightly less trendy name than ‘Switchd’, but ‘Migrate’ means business. No vowel tampering, just a straight-down-the-middle, no-nonsense name.
Migrate’s big thing is its philanthropic mission. According to its website, 310,000 veterans in the UK are currently struggling to afford proper heating at home, so Migrate is doing all it can to rectify that.
Every time a person switches energy suppliers with Migrate, the company gives £10 to the National Energy Action’s Forces For Warmth campaign.
Migrate only offers a free service (there are no paid plans), so its income is generated by commissions paid by the energy suppliers it promotes.
LookAfterMyBills: good for customer service
Despite sounding like they’re commanding you to look after their bills, the service offered by LookAfterMyBills is in fact the opposite. You just hand over a few quick details, and it will try to find you a better deal.
However, according to LookAfterMyBills, ‘better’ isn’t necessarily ‘cheaper’. The company has a free service, so it’s paid by the energy suppliers it promotes, but LookAfterMyBills insists that it only promotes suppliers who have tip top customer service.
Even if an energy supplier wants to pay LookAfterMyBills bucket loads of cash for promotion, the site simply won’t do it unless they have faith that your bills are going to be seriously looked after. It’s admirable stuff.
BillBuddy: good for all of your bills
The BillBuddy brand is about as cuddly as you can get, with a fun, alliterative name, and the side profile of a dog for a logo.
BillBuddy offers a very similar service to the one we’ve described three times above, aiming to find homeowners a cheaper energy deal, and then switching you to it without any hassle.
Its service is free, meaning it gets an income from commissions paid by energy suppliers. However, instead of being ‘partnered’ with specific suppliers, it receives the same rate from any energy supplier that it pairs you with, so BillBuddy’s only incentive is to find you the cheapest deal.
On average, people who use BillBuddy save more than £200 per year on gas and electric.
Plus, if you want a better deal on your broadband, mobile, car insurance, and/or home insurance, BillBuddy can help you with that too. The site’s got fingers in five pies. Five!
Our favourite green energy suppliers
Here’s the other side of the coin – the energy suppliers that you might end up switching to. There are a lot of options out there, so we’ve narrowed down our favourite suppliers who offer green tariffs.
Founded at the turn of the new millennium and based in Hertfordshire, Green Energy is the only energy supplier in the UK that offers 100% renewable electricity and 100% renewable gas. Not just gas that has been carbon offset (which is what every other ‘green’ supplier does), but proper biogas created via anaerobic digestion – although they buy it from other generators, rather than making it themselves.
If you pay extra for their Dual Fuel EKOenergy tariff, you’ll also be funding climate projects and the safeguarding of marine and bird habitats. It’s very honourable stuff.
Founded just before the turn of the new millennium and based in Wiltshire, Good Energy is rather dramatically focussed on “releasing the UK’s energy system from the grip of a handful of huge, fossil fuel generators”.
The supplier offers 100% renewable electricity (the majority – 57% – from wind farms) and 10% renewable gas, with the other 90% being offset via carbon reduction schemes.
It’s also one of the few UK energy suppliers to actually own some renewable electricity generation, including Delabole Wind Farm in Cornwall, and Hampole Wind Farm in Yorkshire.
One question that vegans might ask of ‘green’ energy suppliers is ‘are you vegan?’ – and Ecotricity would answer ‘yes’. Ecotricity is the only UK energy supplier to be recognised by The Vegan Society for their properly vegan energy, and it’s rightfully rather proud of this.
Founded in 1996 and based in Gloucestershire, Ecotricity is bonkers about offshore wind farms, using them to generate almost 85% of its 100% renewable electricity. The company also does a substantial amount of its own energy generation too, using wind and solar to create 25% of its electricity supply.
Ecotricity is also planning to become the first UK energy supplier to create 100% of its gas, currently constructing big ‘gasmills’ that will use decomposed grass as fuel. For now, 96% of Ecotricity’s gas is carbon offset, so there’s a long way to go.
On the fresher, trendier end of the spectrum, there’s Bulb. Founded in 2013 and based in East London, Bulb offers 100% renewable energy and 100% carbon neutral gas – although it doesn’t do any energy generation itself. However, it does claim to be ‘the biggest buyer of green gas for homes in the UK’, so that’s something.
According to Bulb, its average customer decreases their carbon footprint by 3.5 tonnes of CO2 each year, which is similar to the annual work of 1,770 trees. Cop that.
If you didn’t know the Uswitch Supplier of the Year Winner 2020, it’s Octopus Energy. Founded in 2016 and based in Leicester, the energy firm has acquired 1.5 million customers in just four years.
Its electricity is 100% renewable, although its gas is not necessarily green. Instead, each customer can choose whether the gas they use is carbon offset by Octopus – which comes with a fee.
In 2018, Octopus broke new ground with its Agile Octopus tariff, designed to work alongside a smart meter. It’s a ‘time-of-use’ tariff with rates that change every half an hour, allowing customers to adjust their energy usage, and use appliances when rates are at their lowest.
If you own an electric car, you might also be interested in Octopus Go, a tariff with very cheap rates overnight – meaning charging your car won’t cost a bomb.
When should you switch energy providers?
There’s a wide variety of scenarios where switching energy providers is a sensible move – and we’ve outlined some below.
If you want to go green
Ever-increasing clamour about climate change and ever-mounting pressure on everyone to “do more” can take its toll. If you’re thinking you’d like to improve your carbon footprint, a green tariff is a solid option – especially one from an energy supplier who generates their own renewable electricity.
If your fixed rate tariff contract is about to end
Typically, once a fixed rate contract finishes, it will automatically switch to a standard rate tariff, which is usually more expensive. It can be sensible to switch onto a new fixed rate tariff before this happens.
If winter is on the way
A household’s energy usage shoots up in the winter, when people spend more time indoors and use the heating more often. If you aren’t particularly happy with what you’re paying in the summer, it might be wise to get yourself on a cheaper, fixed contract before the winter months.
If you think energy prices are about to increase
Major energy price hikes are usually well publicised before they happen, so if you hear anything through the grapevine, it makes sense to jump ship for a fixed rate tariff with a cheaper supplier.
If your circumstances change
This one’s a bit vague – we mean if you’re moving house, or you’re about to enter retirement, or your kids are leaving home, or a global pandemic forces you into lockdown. Stuff like that. If a big change means your energy usage is about to seriously ramp up or ramp down, a different tariff might be a better fit.
If you want better customer service
Decent customer service is a big factor for many people when it comes to choosing a new energy supplier. It’s important to be able to speak to people directly and quickly whenever something goes wrong with your gas or electricity. If you’re unhappy with your current supplier’s customer service, you should look elsewhere. Even if you end up paying more, it might still be much better value.
Can my energy provider stop me switching?
No, your energy provider cannot stop you switching to another supplier. As we’ve mentioned further up the page, the only thing that will prevent you from moving on is if you’ve owed money to your supplier for longer than 28 days.
However, if you use a prepayment meter, it’s possible to switch suppliers irrespective of how long you’ve owed money – your debts just need to total no more than £500 for gas, and £500 for electricity.
Do I need to tell my energy provider I’m switching?
No, there’s no need to tell your current supplier that you’re making a switch – your new supplier has that job. However, once you’ve paid your final bill to your old supplier, make sure you cancel any direct debits/standing orders.
Do I need to pay an exit fee?
If you’re on a standard variable rate tariff (i.e. a contract with no end date), you won’t need to pay an exit fee. Fixed rate tariffs do charge an exit fee, although this doesn’t apply if you switch within 49 days of the contract’s end date.
Conveniently, your current supplier is supposed to write to you once your tariff is between 42 and 49 days from termination, so you have time to find a different tariff (should you want one).
Exit fees are typically around £30 per fuel type, so if you’re abandoning a dual fuel fixed rate tariff contract, you’ll pay £60 total (£30 for gas, £30 for electricity).
Switching energy suppliers with a smart meter
If you’re lucky enough to have a smart meter as part of the UK Government’s nationwide rollout (most homes are still waiting), this won’t affect your ability to switch energy suppliers.
However, if your new supplier is not equipped to deal with smart meters (particularly your model of smart meter), then you’ll have to switch it off and revert back to using regular meter readings.
Will I get a smart meter if I switch suppliers?
The UK Government requires all energy suppliers to install an SMETS2 smart meter in their customers’ households by 2024. In theory, in four years’ time, every home in the UK should have a smart meter.
So, your energy supplier might give you one, but it depends on their progress with the implementation process. It’s being addressed systematically, so it also depends on where you’re living, as well which energy supplier you have. Basically, it’s a case of waiting your turn.
Although you have the legal right to refuse a smart meter when offered, it is strongly encouraged that you accept it. A smart meter enables accurate and regularly updated monitoring of your daily energy usage, which helps you keep a very close eye on things.