Wherever you live, electricity is one of the necessities without which daily life wouldn’t be comfortable and convenient. We need power for lighting, heating, cooling, appliances we need in households, and all kinds of electronics. If we look at the big picture, without electricity, there would be no public transportation and all other utilities such as water supply, sewerage, Internet, etc.
So we need electricity on a daily basis. The usage is expressed in kilowatt-hours (kWh) for households. It’s clear that the energy needs of commercial buildings are higher and more complex, not to mention industrial plants whose consumption is millions of kilowatts. The quality of power supplied to these users varies, as do its prices.
Speaking of billig strøm i dag for residential users, it should be borne in mind that it’s a fairly competitive market. Many utility providers are ‘fighting’ for consumers, while at the same time trying to keep up with the global energy market. That’s why the price of a kilowatt hour can vary, sometimes even hourly, and users notice these ups and downs on their bill at the end of the billing period.
What Affects Electricity Rates?
Electricity is not something we get directly from nature. In fact, it comes from nature, considering its production requires resources such as coal, gas, water, sun, wind, etc. Through complex procedures in power plants, these supplies turn into energy we use in households.
Power generation, storage, and safe transportation are very demanding jobs that require infrastructure, supplies, and workers. All of this requires certain costs that must be optimal so that the price of a kilowatt hour is affordable for users and profitable for utility companies.
The price of fuel has a lot of impact on electricity rates. Each state defines these rates but keeps in mind the global market and geopolitical events around the world. Of course, the influence of weather conditions, as well as the general energy needs of users, which vary throughout the year, should also be mentioned.
For example, power consumption increases during the summer when most households need additional energy for cooling. Higher demand initiates higher production, which triggers more fuel usage and higher production costs. Eventually, that results in a higher price per kilowatt hour.
Which Electricity is the Cheapest?
As said, the electricity rates depend on the price and availability of the fuel used for its generation. Fossil fuels, such as coal and natural gas, are more complex to produce and require special infrastructure for transportation and storage. That makes electricity derived in this way costlier than when obtained from alternative energy sources.
At the global level, there is an aspiration that alternative, renewable resources such as sun, water, and wind prevail in electricity production. Apart from the fact these fuels are more profitable for generating electricity, making them cheaper for production and more affordable for the consumer, they’re more eco-friendly.
For several years now, there has been a noticeable trend of falling prices for electricity from the sun and wind, which gives consumers more choices. With the developing structures that’ll take the burden of ”regular” grids, these rates will be even more affordable. Still, right now, consumers don’t have too much influence on the formation of electricity prices.
But they can take advantage of the competitive market and the wide range of utility suppliers to find the most affordable electricity plan for themselves. Also, they can take certain steps to enable lower electricity consumption and thus cut energy bills.
How and When to Change Your Electricity Plan
When electricity prices rise, you can’t do too much. But you can do something for yourself, like putting some effort into finding a more affordable electricity plan and energy supplier if your current plan becomes unprofitable. To do it right, you have to know if it’s the right moment for switching.
To get started, check your current plan. Is it tied to fixed or variable energy rates? The first means the price per kilowatt hour is the same throughout the entire contract, regardless of market trends, while variable rates vary. Both plans have pros and cons, and which one you will really enjoy depends on the price movement.
For example, if you have a fixed contract, and energy prices fall, you won’t benefit from rate drops. But in case of economic turmoil that can skyrocket energy prices, you’d be safe and sound. Variable-rate contracts can bring a significant cut to your energy bill if the price of a kilowatt hour falls, but it can also have a significant impact on your budget in the event of a rate increase.
So there’s no golden rule about when and if you should change your plan. You must figure out whether the moment is good or not. Let’s take an example where you’ve signed a variable-rate contract and currently pay a cheap kilowatt-hour.
Due to uncertainty and many global events happening right now, there’s a high chance this trend won’t continue in the future. So now is probably a good time to switch your plan to a fixed one. In this way, you’ll lock in the price of a kilowatt hour at a low rate and achieve significant savings on electricity bills.
How to Find a Cheap Energy Supplier?
There’s no answer to the question of who is the cheapest energy provider on the market. It’s tricky to find a supplier with affordable energy rates and plans to suit all users. Of course, everyone will look for the lowest prices per kilowatt hour, but that doesn’t mean that the cheapest electricity is always the best choice. So you have to dig in and research the offer of electricity plans, as well as their terms.
Check Energy Suppliers in Your State
For starters, you have to check the energy market in your country for available suppliers and their plans. Also, this is a crucial step as some regulations and rules when changing providers differ from country to country.
Research providers and their offers by comparing their plans with your current energy rate. If you’re not sure what price per kWh you are paying, take a peek at your energy bill. If you still don’t get it, contact your supplier for clarification.
When you know the kWh price you pay, you can compare it with other available plans from other energy suppliers. You can do your research or use handy online comparison tools to find the most affordable suppliers in your area. Still, don’t trust these apps blindly but double-check their suggestions.
Check Current Contract Details
Before switching your energy supplier, you should check the terms of your current contract. Look out for details like contract length and early termination fee. That’ll help you find out whether and when you can terminate the plan or change the energy supplier.
It’s possible that, at the moment, you don’t have the option to end the contract and switch providers. That can happen when you’re only a couple of months into a current fixed contract. Switching will only be possible in a few months. In that case, you should better wait than pay penalties for early contract termination.
Checking your current plan might help you spot fees you can waive. That won’t affect electricity rates but can lower your energy bills. Also, you might need these for a comparison with other electricity plans. Thus you can compare delivery fees, transmission charges, early termination fees, etc.
Spot on Your Energy Consumption
The next step towards cheaper electricity is determining your consumer habits and patterns. You can easily do this by simply checking a few recent bills. You will see in which period of the day and year you consume the most electricity. That can give you good guidelines not only for finding the most affordable electricity plan but also for changing consumer habits in favor of energy saving.
It can happen that just revising certain habits can bring you more savings on the current electricity plan than changing it. For example, you turn on the washing machine and the dishwasher at the same time. Changing this habit by using these appliances one at a time (preferably during off-peak hours) is more profitable than switching to another energy plan.
But if you can’t keep up with changing consumer habits, switching to a fixed-rate plan with a great price locked in for a longer period (up to 36 months) is a better option. That way, you don’t have to worry about price fluctuations and market trends. On the other hand, if you don’t want to commit to a single provider, you can opt for shorter contract lengths – usually 12 or 24 months.
Tips on Saving Money on Energy Bills
Each of us has different habits when it comes to electricity consumption. But small changes can bring huge benefits, and that goes for everyone. Some universal tips can help you save energy and lower the bill at the end of the month.
For example, it’s advisable to replace old appliances with new, energy-efficient ones. That may seem like a huge expense, but the return on this investment is very fast, considering that some new devices consume even 50% less energy than outdated models.
Another good tip is to use electricity during off-peak when electricity rates are lower due to lower consumption. Then it’s a good time to turn on larger appliances, such as ovens, dishwashers, washing machines, and even irons. Doing some housework later in the evening or earlier in the morning can lower your energy bill significantly.
If you use electricity for heating, independently or in combination with natural gas, you can insulate your home and replace or upgrade the carpentry. Adding just an inch of extra foam insulation can save up to 15% on heating bills. In case you have an electric water heater, you can insulate it too and thus save even more. Count on even more savings if you draught-proof your doors and windows.
Cheap electricity for everyone is still just a thought, but each of you can do something to provide it for your own needs. Starting from redefining your power consumption to choosing an affordable energy plan, there are ways to save while enjoying the same quality of customer service.
