Energy customers will increasingly find that to access the cheapest fixed tariffs, they need a smart meter fitted.
To keep in line with the Government’s – now extremely unfeasible – target of having a meter fitted in every small business and household by 2020, many customers can only access certain Big Six tariffs if they have a device installed.
Often, these are now the cheapest deals. Eon, for example, is one such supplier where all single fixed tariffs come with the proviso that customers must have a smart meter fitted.
Many This is Money readers have contacted us about Eon, upset that the supplier is essentially mollycoddling them into getting a smart meter, or face being penalised.
Customers who don’t want to have a smart meter fitted are blocked out of getting best deals
British Gas is another major supplier that also requires its customers to have a smart meter fitted to access many of the cheapest deals.
For example, its energy plus boiler cover, a fixed tariff, which has an average annual price of £1,020 a year, says customers must have a meter installed within three months of signing up to the deal or they will be offered a different tariff with alternative – higher – rates.
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The other Big Six suppliers also require a smart meter to be installed for any customer looking to switch to one of their fixed tariffs.
The only time customers can access the cheapest deals without a meter is if their provider is not yet able to install one in their area.
A number say they do not want to have a meter fitted and feel like they are being pressured into having a meter installed, even though there is currently no legal requirement to have one fitted.
However, there are a number of tariffs from smaller suppliers who offer top energy deals that don’t require smart meter installation.
To help save energy customers money and get them on the best deal possible, This is Money, with help from uSwitch, have compiled the cheapest energy deals from these suppliers for both standard variable tariff (SVTs) and fixed tariffs.
From the results, it appears that for those who want to save money and not have the gadget, they need to ditch the Big Six and switch to a smaller supplier.
The cheapest plan was found to be with small provider, Utility Point, which gives customers an average yearly bill of £930 on their UP Variable Direct tariff – plus there are no exit fees.
People’s Energy are the second cheapest, with an average annual bill of just £968 on their People’s Year Fixed tariff.
Customers have to pay two months upfront and will also have to fork out £20 per fuel as an exit fee but this tariff is still much lower than many of the fixed tariffs with the Big Six.
The exit fee attached to ‘per fuel’ means that if customers have gas or electricity, they only pay for one fuel but if they have both, they must pay double.
Avro Energy came in as the third cheapest tariff at an average of £970 a year on the companies Simple and Prime fixed deal which comes with no exit fees.
All of the other seven deals were priced between just £985 and £995 – only a small difference of £10.
While many customers have been frustrated with suppliers’ decision to insist on having a smart meter installed, Smart Energy GB, who are in charge of the smart meter rollout, confirmed that providers are permitted to offer lower tariffs and can insist on smart meters as a condition.
Robert Cheesewright, director of corporate affairs at Smart Energy GB, said: ‘Some of the cheapest energy deals around are only available to those with smart meters so it makes perfect sense to switch to a smart tariff and contact your energy supplier today about your own installation.
‘Smart meters deliver savings to energy suppliers and it’s pleasing to see those savings being passed onto consumers through lower and smarter tariffs.’
It confirmed the supposed reduced rates within smart meter tariffs reflect the lower cost to the supplier of providing services, in the same way that suppliers previously offered discounts to those receiving e-bills rather than paper bills.
It said because of this there are less costs involved, for example no processing meter readings or dealing with billing enquiries, these savings are being passed onto the consumer.
While the tariffs that require smart meter installation aren’t found in the best buys tables, they are not the most expensive deals either.
But customers are also feeling the pinch with energy prices due to price cap increase which was announced by Ofgem at the beginning of February, in response to the rising wholesale cost of gas.
Subsequently, a number of energy suppliers, including all of the Big Six, increased their prices in response meaning millions of customers will see their bills rise when the hike kicks in on April 1.
Although many smaller energy suppliers are offering cheaper deals, a number have gone bust in recent times, including Extra Energy, Spark Energy, Future Energy, National Gas and Power, Iresa Energy, Gen4U, Usio Energy, One Select, Our Power, Brilliant Energy and Economy Energy.
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Millions of households are sat on their provider’s most expensive, out-of-contract deals. But switching to a better deal can instantly save you money.
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