How to beat the energy bill hikes

A string of ageing coal and oil-fired power stations are set to close over the next three years, and with no new plants to replace them, the UK will have to import gas from abroad.

That will inevitably lead to more inflation-busting hikes in household fuel bills, said Ofgem’s outgoing chief executive Alistair Buchanan.

Channel 4 News takes a look at some of the best ways to cut your energy bills.

Switch supplier

While most energy suppliers will have to raise prices if the wholesale cost of gas and electricity goes up, there are still likely to be big differences between different tariffs offered by the rival companies.

The government’s new energy bill, which is currently passing through parliament, will require energy companies to simplify their price plans and tell customers about the cheapest tariff they could be on.

But the legislation will stop short of forcing companies to switch people’s tariffs, so consumers still need to be prepared to take action.

Homeowners should not wait until the new rules come in to make potential savings of hundreds of pounds, according to price comparison websites like energyhelpline.com, Which?, Switch and uSwitch.com.

A spokesman for uSwitch told us customers could save up to around £250 by changing to a different tariff, adding: “The energy bill is a useful first step but people still need to be taking the information and using it.

“The majority of consumers are still signed up with one of the big six suppliers, but very often we are seeing the best deals coming from the smaller independent suppliers.

“It’s going to take some time for the changes to come through, and there is also an element of trust when it comes to dealing with the big suppliers. There will still be a need for independent comparison sites.”

Invest in renewable energy

New technology like heat pumps and solar panels are starting to look more attractive to the average consumer who does not want to be at the mercy of their gas and energy supplier.

Fans of green energy have a range of technology to choose from, like photovoltaic solar cells, heat pumps that harness energy from the ground, biomass boilers and wood burners.

In some cases there are big government grants available to offset the initial capital cost of kitting out your home with a whole new heating system.

Matthew Townsend, a sales manager at renewables specialist Ice Energy Technologies, said photovoltaic panels were the hot option until the government cut feed-in tariffs.

Now sales of ground and air-source heat pumps are up after ministers announced a generous subsidy called the Renewable Heat Incentive.

Buyers are in line to get tens of thousands in grants from the government, meaning that the pump will pay for itself within seven years.

Mr Townsend said: “The government is trying to promote this low-carbon technology, and once they are happy with the uptake the level of grant funding will probably be cut.

“Our advice is for people to invest in the next 18 months or two years while the levels of funding are at their highest.”

Insulate your home

The Energy Saving Trust told us a household can cut fuel costs by more than £300 per year by improving insulation and changing behaviour.

Simple steps like turning down the thermostat, switching off lights and electrical devices when they are not in use and being more careful with kitchen appliances can save £155 a year, according to the trust.

Switching to a more efficient boiler or investing in loft insulation and double glazing could save even more.

Again, the capital costs are high but government money is available.

The government’s Green Deal effectively gives homeowners a loan to carry out insulation projects with no up-front costs. The costs are paid back bit by bit through future fuel bills, with the golden rule that you make a saving over 25 years.

Again, time may be of the essence. The current limit is £10,000, but that could change. And the government is offering a cashback scheme as an extra incentive for a limited time.

Some consumer protection groups have advised caution over the Green Deal as there may be upfront fees for assessments and interest is payable on the loan.

The Scottish government still operates a boiler scrappage scheme, offering £400 towards the cost of an upgrade. A similar scheme that used to run in England and Wales is now closed.

Think outside the box

Some backyard engineers have come up with creative ways of cutting their heating bills.

An unused satellite dish can be converted into a solar collector, driving a steam engine and creating heat or electricity.

Bonkers, brilliant and perhaps the shape of things to come if fuel bills continue to soar.