There was a time when being an energy customer was straightforward, but increased competition in the marketplace has made it more convoluted, with many different tariffs and products on offer. This guide give a basic breakdown of the most common tariffs around at the moment
Each supplier has it's own standard tariff, which have variable prices that change with the market value. There are no fees for leaving the supplier, and agreements are 'rolling' on a monthly basis, meaning you can leave at any point. The prices won't be as cheap as with some other tariffs, but you do have the flexibility to change supplier whenever you choose.
Unlike the standard tariff, unit prices and rates are fixed for a defined period of time. Some suppliers charge an exit fee, but with many you are free to switch at any time. Regardless, under Ofgem rules you can switch with 49 days before the end of the agreement with no fee applicable. Fixed tariffs are generally cheaper than standard tariffs, but on the reverse side of that you won't benefit from any price cuts that might occur
Dual Fuel Tariff
Buying gas and electricity from the same supplier will mean that you qualify for a dual fuel tariff. In doing so it's likely that you'll get cheaper rates than those customers who just buy one fuel from the supplier. Aside from that you have the convenience of just having to manage one account, and deal with one supplier. There may or may not be an exit fee if you decide to switch as it can vary by supplier. If you're not bothered about convenience, you may be better off buying your energy from separate suppliers where you can possibly get even cheaper rates.
Online tariffs require you to manage your account via an internet portal. You often get cheaper rates, as presumably it's a cheaper system for the supplier to manage. Also you can easily submit readings online, meaning that you only ever pay for your actual consumption. Furthermore you can get electronic bills sent via email, or download them from the portal, which makes record keeping a lot easier for you. It's a good cheap option, particularly if you're comfortable with managing your account across the internet. Some suppliers charge exit fees, depending on the tariff.
Economy 7 Tariff
These tariffs are for those with prepayment meters, which enable customers to pay in advance for their energy by topping up their meters with a prepaid key or card. Prepayment meters are normally installed at addresses with a history of debt or missed payments. You can switch supplier to a new prepayment tariff if you have up to £500 of energy debt, although this value may be lower with smaller suppliers. Prepayment meters are widely cited as being one of the most expensive ways to pay for your energy and should be avoided where possible.
Green tariffs are designed so that energy companies are seen to be doing something about the 'green' issues their business causes. Normally the supplier will pledge one of two things; either they match your usage with energy generated from renewable sources, or they contribute towards and environment scheme on your behalf. Green tariffs generally are higher than average energy prices, meaning the suppliers good will gesture is at least partly being paid for by the customers. That being said you can get some competitive deals versus the other tariffs if you shop around.
Feed-in Tariff (FIT)
This is quite the opposite of any of the tariffs mentioned above, in that the energy supplier pay you for generating energy using renewable technologies. Find out more in our guide 'Domestic Budgeting – Energy – Feed In Tariffs'