Conundrum - Fixed Tariffs

[cojmh]

Bit of a conundrum I am trying to work my way through and am after other people's opinions (Disclaimer: I understand this is not financial advice and I will be making up my own mind irrespective of what is said here - but I am interested to see if I have missed any considerations).

I have for many years been on fixed tariffs to ensure I control what we spend and know our obligations. However our energy supplier went bust last September/October and I ended up with British Gas on their standard rate through SoLAR.

It appears that British Gas have released a fixed rate product this month which is only available to people that came through from other suppliers that went bust. I found this out this morning through Money Saving Expert who say that this might be worth considering for people - but I am guessing this is a standard person who does not necessarily have PV/batteries and which might push this more in my favour because I do (so makes it a less risky change over).

This is the link to the article: Money Saving Expert

My current reasoning is that the price cap will probably go up in October by between 30% and 50%. Which is something that is going to be unavoidable unless you are on a fixed rate tariff. I also don't have any realistic form of meaningful power generation from November through to March. so this is a concern. Don't get me wrong we could weather the price increase - but I would like to mitigate it as much as possible.

From now till October any price difference will largely be mitigated by the fact we can generate a significant proportion of what we need and store it for a while.

So I am interested in other people's thoughts or sources of information that might help with decision making.

Currently my tariff Vs new tariff is:

Elec Standing Charge
48.13p -> 54.976p (daily change of 6.846p per day, which is approx £10.27 for the next 5 months so not that significant)

Elec Unit price
27.865p -> 32.693p (change of 4.828p per unit)

Gas Standing Charge
27.220 -> 34.069p (daily change of 6.849p per day, which is approx £10.27 for the next 5 months so not that significant)

Gas Unit price
7.367p -> 10.034p (change of 2.667p per unit)


Money Saving expert reckon it will be 26% price increase over the current price cap pricing.

In terms of our house consumption.

Gas

I can pretty much turn off our central heating now (ish) and leave it off till September/October meaning gas usage will be hot water tank only. I will also have my solar diverter wired in by the end of this month to put excess energy into the HWT

Electricity

I am seeing our daily use having dropped off to 2-3 KWh normally but can be as low as 1KWh .... but on a bad weather run such as now we can sometimes end up with 15Kwh to 18KWh per day. Mitigation will be the removal of the electric showers ASAP but that might be 2-3 months away.


My current (non maths) reasoning is that we are likely to see a significant price increase (possibly as high as 50% especially if the EU don't pay in Roubles) and I think I can get our usage between now and October down to quite a low level making any price increase from now till October not as significant. My finger in the air thought is that if we have a normal consumption of 18KWh for electricity I can get this down to an average of 6KWh or less between now and October. but we will be at the full 18KWh from October to March.

So any price increase now would be more than off set by savings come October especially if it is closer to 50% price rise.

Ultimately if worst comes to worst then I can pay £150 and get out of the tariff in the future anyway.

So interested in thoughts and hopefully it is not inappropriate for me to post this here. Please delete if it not appropriate.

Thanks,

[Phoooby]

Is it possible for you to charge your battery overnight. Maybe an E7 rate may be worth it depending upon the size of your battery. Octopus Go is good but you now need an EV to join. Not looked to much at the market as I have been on Octopus for years.

[marshman]

It is not clear cut by any means. With energy costs so high and the future uncertain I don't think anyone can predict which way things (up or down) and when. I think long term, electricity costs will come down but when is anyones guess.

If, and it is if, the price cap goes up by around 30 to 50% as predicted in October you will be worse off than on the fixed rate. As you point out you it will be in the winter period where consumption is higher and your own generation is less so the difference will be larger BUT my gut instinct is to stick with the price cap and forget the fixed tariff with its £150 exit fee and monitor the situation. The difference is marginal overall in my mind, but only you know your own situation in terms of usage.

[Ken]

Its all supply and demand and if one side changes too rapid or large then a price spike or collapse occurs. This is a temporary event like when oil went to zero last year or spiked in the Arab embargo which gave rise to the North oil and gas industry.

This price spike has spurred on all renewables and storage at all levels and focused the mind. Hit peoples pocket and watch them move.

As they say "normal service will be resumed" the only doubt being when but as most things it happens quicker than people expect and i doubt a price increase in October

[marshman]

Its all supply and demand and if one side changes too rapid or large then a price spike or collapse occurs. This is a temporary event like when oil went to zero last year or spiked in the Arab embargo which gave rise to the North oil and gas industry.

This price spike has spurred on all renewables and storage at all levels and focused the mind. Hit peoples pocket and watch them move.

As they say "normal service will be resumed" the only doubt being when but as most things it happens quicker than people expect and i doubt a price increase in October

Agree with that 100% - prices nearly always over react to any give "shock" to the system. The public have been "softened up" to expect a 30 to 50% increase and will be "relieved" when if is "only " 10% or whatever

[cojmh]

Is it possible for you to charge your battery overnight. Maybe an E7 rate may be worth it depending upon the size of your battery. Octopus Go is good but you now need an EV to join. Not looked to much at the market as I have been on Octopus for years.

Thanks for the thoughts

Because I an FITs with a hybrid inverter, it is not possible to charge the batteries through a time of use tariff.

I have been looking at the AC chargers and a second battery stack but I think that is a year or two away if I am honest. I have even looked at getting something electric and super cheap (that I would not use) to see if I can get onto something Octopus Go ... but again I think that is much further down the line.

Good idea though

[cojmh]

It is not clear cut by any means. With energy costs so high and the future uncertain I don't think anyone can predict which way things (up or down) and when. I think long term, electricity costs will come down but when is anyones guess.

If, and it is if, the price cap goes up by around 30 to 50% as predicted in October you will be worse off than on the fixed rate. As you point out you it will be in the winter period where consumption is higher and your own generation is less so the difference will be larger BUT my gut instinct is to stick with the price cap and forget the fixed tariff with its £150 exit fee and monitor the situation. The difference is marginal overall in my mind, but only you know your own situation in terms of usage.

This is exactly the crux of the issue.

The problem is that the news (if we can call it that now) is so twisted you can never really understand what is going on. There is talk of Putin taking things further on an upcoming anniversary but I have doubts over that. There is the constant push from EU/NATO to get rid of all energy imports from Russia etc. which is going to take time or will it blow over once the Ukraine situation has resolved itself?)

I did find an energy monitoring website that was "predicting" with a pinch of salt that price rises would happen in October but we would see a drop next April (but still it would be above the current price cap) before coming down to below the current price cap in October 2023 .... but it is quite opaque as to how they have worked this out. So the shock in general seems to be expected to last for another 12 to 18 months.

The factor that is leaning me a bit towards taking it is that on the "open market" the cheapest fixes are considerably more expensive than even this offer from British Gas and British Gas have limited it to those that have been moved across through SoLAR (a group that is very unhappy with British Gas and been in the news a lot about it) so whether this is some appeasement strategy.

I think I need to do some more sums with respect to the Worst/Medium/best case scenarios ....

[cojmh]

Its all supply and demand and if one side changes too rapid or large then a price spike or collapse occurs. This is a temporary event like when oil went to zero last year or spiked in the Arab embargo which gave rise to the North oil and gas industry.

This price spike has spurred on all renewables and storage at all levels and focused the mind. Hit peoples pocket and watch them move.

As they say "normal service will be resumed" the only doubt being when but as most things it happens quicker than people expect and i doubt a price increase in October

Thank you - this is a very plausible outcome too.

[nowty]

As they say "normal service will be resumed" the only doubt being when but as most things it happens quicker than people expect and i doubt a price increase in October

Although energy prices have dropped back quite a bit unfortunately for the October price review, its based on prices from Feb to July and the announcement is in Aug so a lot of the price increase is already baked in. But the increase is looking like less than was feared a few months back.

Also I don't know if the standing charge will drop as I don't know over what time period the costs of the failed energy companies will be paid back over. And whether the cost of the failure of Bulb will be ultimately paid by taxpayers or bill payers as the liabilities there are equal or more than all the other failed companies put together. Its currently being paid through taxation but that might change, especially if unit prices finally drop next year. Then there is also more of the network charges being loaded onto the standing charge, I think there is another trance of those to go. Then we have the circa 11p per day increase from next April for 5 years to payback the compulsory £200 credit we are getting in October.

[AE-NMidlands]

Bit of a conundrum I am trying to work my way through and am after other people's opinions

Ultimately if worst comes to worst then I can pay £150 and get out of the tariff in the future anyway.

So interested in thoughts and hopefully it is not inappropriate for me to post this here. Please delete if it not appropriate.

Thanks,

I am amazed by the size of that charge to leave a tariff - and it would have to be an exceptionally good deal on the fuels to get me to take it.
My gas from Octopus/Coop tariff is 5.08 p/kWhr and elec 21.99p. Standing charges 26.6 and 23,5 p per day respectively but no penalty for leaving the 12-month fix at any time.
Have you looked at changing supplier? I know they say that there isn't much point at the moment, but all those prices are so high that I would check it out anyway.
A