Solar panel installations at home will make more sense now that electricity prices in the U.K. have hit a 10-year high as of early March. The good news, however, involves Ofgem’s proposal that could provide Britons with as much as £5 billion of savings from their power bill.
The energy regulator expects to achieve this within a five-year period by lowering households’ contribution on energy network investments.
Ofgem intends to reduce consumers bills starting in 2021 by imposing a cap on electricity companies’ investment returns to their shareholders, which is also known as the “cost of equity range.” The proposed rules would reduce shareholder payments to as low as 3 percent, down from the current 6 to 7 percent.
This would be beneficial for the average consumer, yet many already took action on lowering their bills by switching to a new power supplier. Many households have become more confident about making the switch due to the Energy Switch Guarantee (ESG), according to Energy UK.
Choosing a New Provider
The ESG assures that you will still have a safe and uninterrupted power supply while switching to a new electricity provider. In February, more than 660,000 households changed their power supplier to get the best deal possible.
Energy UK said that this represented the biggest number of households for a single month on record. As a result, competition among energy companies has increased in a bid to lure and retain customers.
Some households have also preferred small- and mid-tier companies when replacing their current supplier, especially since some large providers such as British Gas have increased their rates.
Renewable energy sources serve as a good option to save money on your electric bill. While Ofgem’s proposal seems good, it will take some time before households experience its benefits. How do you reduce your energy consumption?