Published On: Tue, Jul 11th, 2017

4 Reasons Why You Should Switch Your Energy Tariff

Since the 1970s, the deregulation of energy markets in certain states across the U.S. has been in full flow. Since this point, millions of customers across the country have been given the choice to switch their energy provider in favour of cheaper, more competitive pricing.

This may seem like a bit of a strange concept to a large percentage of the population, especially those whose states have not yet received any level of choice. However, it’s likely that this trend will continue and little by little, we’ll move closer towards a completely deregulated country. Switching your energy tariff is quick, simple and a great way to knock large amounts of money off your annual expenditure. But what about the details? Here’s four great reasons for why you should be switching your energy tariff.

photo Ulfbastel

  1. Save huge amounts of money

The number one reason: save yourself money and stop overpaying for no reason. For years, the incumbent, local energy company in each state has run all operations in relation to energy, meaning you have no choice but to pay whatever figure they ask. Not anymore. The supply sector of gas and electricity has now been open to competition, meaning there is more than one price to pay for your energy supply, many of which are far cheaper than what you will have been paying previously. This has been happening across the pond for many years now.

For example, in the United Kingdom, the energy markets were completely open up for competition in 1990. Just like in the US, though, prices vary depending on where you are in the country, as the distribution and transmission networks are still monopolised in each region, meaning prices in London, for example, can often be much more expensive than in Glasgow.

The potential savings that you stand to see in your state are not just a few dollars per year, but are generally in their hundreds of dollars, meaning it is certainly worth making the switch and saving money for such little effort.

photo/ screenshot YouTube

  1. Lock in a unit price and avoid the increases

Residential energy tariffs are split up into two main categories: fixed and variable. These two tariff types refer to how your price per unit of energy is billed. On a variable tariff, the price per kWh of electricity and therm of natural gas will vary depending on such variables as wholesale costs, time of year and generation productivity. However, if you opt for a fixed tariff in the new, deregulated market, you will pay one single price per unit for the duration of your contract, meaning you avoid sudden price increases and know exactly how much you are going to be paying all year round.

  1. Go green and switch to a 100% renewable tariff

A majority percentage of electricity suppliers in the open market have now started providing tariffs that offer a 100% renewable supply. Despite it being impossible to physically receive 100% renewable electricity when you use the same distribution network as those who don’t opt for this tariff type, you are still essentially deleting your usage amount of electricity from non-sustainable sources. Both green and non-green electricity enter the grid simultaneously, but the less demand for non-green generation there is, the higher the energy mix will be in favour of sustainable generation methods. Green tariffs are often a little higher in price than standard tariffs; however, it usually really is a little. Opting for one of these deals and doing your bit for the environment will still save you huge amounts of money in comparison to your incumbent tariff.

  1. Make the rest of the US follow suit

Increasing switching numbers means only good things for consumers. By removing complete authority from your state’s incumbent supplier, they will need to be much more competitive with their pricing. This will also open up the market for more and more companies to fight for a piece of the pie: the more that companies realize that their market share is not guaranteed, the more they will be forced to fight for their customers’ support and custom. The easiest way to do this is by making the whole country realise that deregulation is the way forward, following the example that much of the world has already set.

Given that the estimated average price difference between an incumbent and a deregulated supplier is around 30%, why would we not want to switch?

Author: Elliott Waterhouse

photo/ Public domain pictures via Pixabay

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