What affects average energy bills?
It’s not just property size that affects your energy bills. Where you live, how well insulated your house is and how efficient your home appliances are will all impact how much energy you use to keep your home ticking over.
The type of tariff you’re on, and how you pay for your energy also makes a difference. If you haven't signed up to a fixed tariff, you might be on a Standard Variable tariff (SVT) which is usually more expensive.
Your energy use is obviously the most important part of your bill. Your energy provider charges for each unit, or kilowatt hour (kWh), of energy you use, so the more you use, the more you pay. Don't know what's watt? Find out more about kilowatts and kilowatt hours on our handy blog. There’s a lot more to your bills though.
The wholesale costs of gas and electricity make up just under 40% of your energy bill. That’s what it costs your supplier to buy the energy you use. These prices can change from day to day and have gone up a lot recently. We’ll go into that in more detail later…
Network costs are next, making up about a quarter of your bill. These costs are set by the distribution network in your region and cover the use and maintenance of the energy network (aka the pipes and wires that get the gas and electricity to your home). Want to know more? Find out which network you’re on.
Operating costs make up about another 18% of your bill – this is the day-to-day expenses each energy company has to cover.
Energy companies are also obligated under government programs to save energy and lower emissions. The cost of these schemes is passed onto customers and adds about 13% to energy bills.
Finally, there’s VAT (Value Added Tax), profit margins and other costs that make up the remainder of your bill.