With the cost of living soaring, everybody is looking at ways to save money, and one of our biggest expenditures is on energy bills: Gas and Electric.
Energy prices are double last winter and in this blog, we will look at how much gas and electric actually cost, how to work out your metered costs, and how much it costs to use appliances around the home.
What is the cost of Gas and Electricity in the UK?
On 1 Oct 2022, the new energy price guarantee landed. Originally planned to last two years, it will now end in March 2023 with the Government yet to announce what will happen after this date. We can only assume that this cap will be extended or prices will rise.
There is NO TOTAL MAXIMUM that you pay for gas and electricity – it is the unit rates and standing charges that are capped. The more gas or electric you use, the more you will pay. The £2,500 figure which is banded about by the media & Government is not the maximum amount you will pay; it simply refers to an ‘average household bill’.
Energy prices are capped as follows (rounded up):
Electricity Unit rate: 34p/kWh Standing charge: 46p/day
Gas Unit rate: 10p/kWh Standing charge: 29p/day
This is for direct debit payment only, other payment methods differ. There are also some small regional differences. The unit rate spend will vary depending on how many appliances you use over time, but the standing charge applies every day even if you are not using any appliances. Even if you switch off everything in your home, you will still pay standing charges of £274 per year.
How do you calculate the metered energy cost?
It feels like Energy Suppliers intentionally make it difficult for us to work out real usage costs.
Electric meters record in kilowatt hours kWh which is what suppliers use to bill i.e. 34p/kWh, but gas meters record in cubic meters requiring conversion to kWh.
Gas usage is measured by your meter in cubic meter units, so to turn this into a kWh unit rate you have to use the following calculation: Gas units used x calorific value 39.5 x volume correction 1.023 divided by 3.6
So, 1 gas meter unit is 11.23kWh and costs (x 10p) £1.12.
For example, my gas bill for 5 months was usage of 1013 units or 11,375 kWh at a cost of £1,137.
My electric bill for 5 months was usage of 1102 kWh at a cost of £375.
(Don’t forget the daily standing charge will be added to this).
How much does it cost to run typical gas appliances?
Gas appliances are rated in Watts or kW (1000 Watts) and 1kWh currently costs 10p. Therefore, a 24 kW gas boiler would cost a maximum of 24 x 10p = £2.40 to run for one hour.
The reason we say maximum is because many appliances, especially heating appliances, do not run at full capacity the whole time, so this is a good rough rule of thumb.
For most households, the biggest cost over winter will be the gas boiler. Most modern houses have gas combi boilers which heat water and power the central heating. The size of the boiler will vary depending on the size of the house – from 24 to 40kW appliances.
For a home containing three bedrooms, a bath and a shower, and up to 10 radiators, a typical combi boiler would be 24kw. So, to run this for 10 hours a day would cost a maximum of £24.
Turn your thermostat down!
This is one of the easiest things to do. For every degree you cut, expect to cut bills by around 4% or about £115 a year on average for a typical home. The World Health Organisation says that 18 degrees is enough for healthy adults, with slightly higher temperatures needed for the very old or young.
If you have valves on your radiators you can turn down the heat in individual rooms you don’t use.
Turn your boiler down!
Many combi boiler flow rates are set higher than necessary as default - this is the temperature of the water that circulates around the system. A key way to save money is to reduce the flow temperature – this can cut gas bills by over 9% and you are unlikely to notice the change, as your hot water and room temp is unchanged (they just may take a little longer to heat up). You can set this with the control on your boiler that usually has a radiator symbol on it.
If the hot water for your shower is coming from the combi boiler, according to the Energy Saving Trust, cutting just a minute off your shower time could save £35 a year in energy bills, and a further £30 a year in water bills if you have a meter. If you balk at the idea of having shorter showers, fit a water-saving shower head to your shower.
How much does it cost to run typical electrical appliances?
Turn that TV off if you're not watching it, it's wasting electricity!
How much electricity is it really wasting? and would it not be better to switch off the 4 lights in the room?
The best way to compare the cost of running different appliances is to look at each of their power consumption measured in Watts. The list at the bottom of the page points out typical values for the wattage of some devices you would find in your home so that you can compare them.
Electrical appliances are rated in Watts eg 100 watts (a tenth of a kW). The wattage of an appliance is usually stamped on its bottom, back, or nameplate so should be easy to find. There are 1000 watts in a kW, and you pay 34p per kW per hour.
A 1000W appliance on for two hours is a maximum 34p x 2 = 68p.
A 100w appliance on for 8 hours is a maximum 3.4p x 8 = 27.2p.
It’s important to bear in mind the length of time for which the device will be used. A 200W electric blanket may be used for 2 hours, but a 2kW hair drier for 5 minutes. The blanket uses 200W x 2 hours = 0.4kWh, the hair drier uses 2KW x 0.0833 hours = 0.166kWh. Using the blanket costs roughly 2.5 times as much as the hair drier.
How much do cooking appliances cost per use?
Air fryers have become incredibly popular thanks to their speed, slow cookers are the choice for some, while many like to zap certain foods in the microwave for speed and ease.
If you use a 1500W air fryer for an average of one hour per day, it would cost maximum 51p.
A slow cooker can be as low as 200W of power, if you use that for five hours it would cost 34p.
Five minutes usage of a typical 800W microwave will use just a few pence of energy.
Meanwhile, the average fan oven uses 2.1 kWh of electricity an hour, meaning around 71p an hour.
A gas hob typically uses 2 kWh which means it would cost 20p to use for one hour.
Other than the hob and oven, the kettle is probably the most used appliance in the kitchen. If you use a 3000W kettle for an hour a day it would cost you £1.02. However, most people aren't boiling a kettle for an hour at a time; the average kettle takes five minutes to boil meaning it would cost you 8.5 pence to boil the kettle for a cuppa.
How much do household appliances cost per use?
Tumble dryers are one of the most expensive appliances typically costing up to £2 a load. So, drying clothes on an airer or outside to shorten or even avoid the tumble dryer completely, can heavily cut costs. Try timing it so you put your washing out on a clothes horse during the hours your heating comes on. Drying clothes indoors on an airer can cause problems with condensation and damp, especially in old and poorly insulated homes, so it is best to dry your clothes outdoors whenever the weather allows.
Alternatively use a dehumidifier for drying clothes. A dehumidifier can cost as little as 8p an hour to run in comparison to a tumble dryer. While these can’t match the speed of a tumble dryer, they can produce the exact same (if not better) results in a way that is more cost-efficient and that provides additional benefits for the quality and condition of a home.
The average washing machine uses 2100W - a two hour cycle will cost £1.42.
A two hour cycle on a 2500W tumble dryer will cost around £1.70.
If you do two cycles a week that is £3.40 a week, or £177 a year.
An iron can use as much as 1500W meaning an hour of ironing would cost 51p. Meanwhile, a vacuum cleaner on average uses 900W meaning an hour would set you back 31p.
What do energy ratings mean and why are they important?
One way to potentially save energy and cash is to buy an energy-efficient appliance. When you buy a new appliance, it normally has a label telling you the energy rating from A to G.
Most of us have a fridge-freezer and it is on 24 hours a day. A fridge-freezer with an energy rating of D might use 408 kWh per year at a cost of £138. If you went for the most efficient fridge-freezer with an energy rating of A, the usage could drop significantly to 206 kWh per year at a cost of £70.
You can see how investing in an energy efficient fridge-freezer could save you nearly £70 per year on your energy use – and that’s just on a single appliance!
Know your budget!
Knowing the cost of using your utilities is one thing, knowing how much you have available to spend is another.
Some typical electrical appliances costs
All values reported here are estimates; you should check the appliance labels or literature to find out the correct power consumption:
(1) kWh (kilowatt hours) are the units used to measure how much power is used by an appliance. It works out as the watt power of an appliance divided by 1,000 (when used for one hour). (2) Prices based on 1 October 2022 price guarantee rate of 34p/kWh.