April 2024 Ofgem Price Cap More Expensive For Low Usage ?!
Posted: February 25th, 2024, 8:56 am
We have solar panels and a storage battery, so the April to September period is a very low usage period for us. Electricity drawn from the Grid drops to 1-2 units a day on average (Grid usage can often be zero on sunny days where daytime solar generation covers our daytime usage and charges the battery which then covers our night time usage). Gas usage also falls to a very low figure as the Central Heating is off and we switch to using the electrical immersion heater (powered by solar or the battery) for one of our two daily water heating periods. (Theoretically we could do both water heating slots that way but I dont want the boiler to be sitting there not being used for 6 months at a stretch as I fear it might develop problems if we try to use it in that way – this way it gets to work for a short period every day).
I read our meters weekly and have done for many years (no smart meters for us !) so I know that our total usage for April to end of September 2023 was as follows:-
Gas 142 units = 1585.4 KWh
Electricity 83 units = 83 KWh
Now we took out a one year fix with Octopus last September, fixing at about 5% less than the Ofgem January 2024 rates.
Rates for our one year fixed tariff are as follows;-
Gas 7.24 per KWh, standing charge 27.47p per day inc VAT
Electricity 28.36p per KWh, standing charge 47.95p per day inc VAT
Rates for the new Ofgem Apri2024 are as follows;-
Gas 6.04/per KWh, standing charge 31.43p per day inc VAT
Electricity 24.5p per KWh, standing charge 60.1p per day inc VAT
See link https://www.ofgem.gov.uk/publications/c ... 0per%20day.
Now the April cap rates are definitely lower, but the standing charge figures have increased enormously. On these figures consumers will be paying 91.5p a day in standing charges, that’s ~£334 a year on its own without consuming any units !. Not to mention a possible extra £28 one off charge to help suppliers cover debts from consumers who haven't paid their bills.
Anyway I calculated our costs for the April to end of September period (using my spreadsheet which has proven accurate at reproducing my suppliers bills subject to tinkering with the conversion factor which sometimes needs adjusting) based on the figures given above and got the following results:-
April – Sep on our One year fix tariff
Gas £160.88
Electricity £110.10
Total £270.98 inc VAT
April – Sep on the April 2024 Ofgem tariff
Gas £152.94
Electricity £129.71
Total £282.65 inc VAT
So it would appear that for us the April 2024 Ofgem price cap is ~£12 more expensive than staying on our one year fix !. All due to the swingeing increase in the standing charges it seems to me. We will be staying on our one year fix as its cheaper and switching from our one year fix would cost £75 per fuel.
I suspect that anyone else whose usage is low might well find themselves in the same situation and for them April 2024 Ofgem cap wont be a price reduction but a price increase !.
ATB
Pref
PS Im aware that the April cap only lasts till the end of June 2024, but my primary interest was in whether it saved us enough to be worthwhile taking the £150 hit to change our tariff. To do that I felt I needed to do the comparison over the remaining period of our fix. The results seem pretty clear and any changes in the Ofgem July 2024 cap seem unlikely to affect the decision.
I read our meters weekly and have done for many years (no smart meters for us !) so I know that our total usage for April to end of September 2023 was as follows:-
Gas 142 units = 1585.4 KWh
Electricity 83 units = 83 KWh
Now we took out a one year fix with Octopus last September, fixing at about 5% less than the Ofgem January 2024 rates.
Rates for our one year fixed tariff are as follows;-
Gas 7.24 per KWh, standing charge 27.47p per day inc VAT
Electricity 28.36p per KWh, standing charge 47.95p per day inc VAT
Rates for the new Ofgem Apri2024 are as follows;-
Gas 6.04/per KWh, standing charge 31.43p per day inc VAT
Electricity 24.5p per KWh, standing charge 60.1p per day inc VAT
See link https://www.ofgem.gov.uk/publications/c ... 0per%20day.
Now the April cap rates are definitely lower, but the standing charge figures have increased enormously. On these figures consumers will be paying 91.5p a day in standing charges, that’s ~£334 a year on its own without consuming any units !. Not to mention a possible extra £28 one off charge to help suppliers cover debts from consumers who haven't paid their bills.
Anyway I calculated our costs for the April to end of September period (using my spreadsheet which has proven accurate at reproducing my suppliers bills subject to tinkering with the conversion factor which sometimes needs adjusting) based on the figures given above and got the following results:-
April – Sep on our One year fix tariff
Gas £160.88
Electricity £110.10
Total £270.98 inc VAT
April – Sep on the April 2024 Ofgem tariff
Gas £152.94
Electricity £129.71
Total £282.65 inc VAT
So it would appear that for us the April 2024 Ofgem price cap is ~£12 more expensive than staying on our one year fix !. All due to the swingeing increase in the standing charges it seems to me. We will be staying on our one year fix as its cheaper and switching from our one year fix would cost £75 per fuel.
I suspect that anyone else whose usage is low might well find themselves in the same situation and for them April 2024 Ofgem cap wont be a price reduction but a price increase !.
ATB
Pref
PS Im aware that the April cap only lasts till the end of June 2024, but my primary interest was in whether it saved us enough to be worthwhile taking the £150 hit to change our tariff. To do that I felt I needed to do the comparison over the remaining period of our fix. The results seem pretty clear and any changes in the Ofgem July 2024 cap seem unlikely to affect the decision.