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Are small energy companies cheaper?

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Read how close small energy companies' prices are to the big six at present, and get a top-tip on getting an accurate price comparison.


Have you ever considered switching to a smaller energy supplier? We know that many people like the customer service and transparent pricing that smaller energy companies offer.

We also get feedback about being treated much more fairly, especially from metered customers. It's clear that this is often the case, with Utilities Warehouse and Ebico getting the most positive feedback. However, on price they are at present struggling to compete with the best deals.

Low-energy users

'Low-energy user' sounds like someone who moves very slowly, but actually I'm using the generally accepted definition of low-energy user ,which is a household that uses 1,650KWh electricity and 10,000KWh gas.

I'm going to stick with the Guildford post code I've been using in other articles for consistency's sake, but you should look at your own area yourself, as this will just be an indication. Here are the cheapest dual fuel tariffs from the smaller suppliers in this area:

Low-energy user in Guildford

Supplier

Estimated annual cost

Telecom Plus (Utility Warehouse)

£607

first:utility

£636

Sainsburys Energy

£641

The National Trust Green Energy

£642

utilita

£652

Spark Energy

£686

If a small energy supplier is missing from any of my tables it's because they don't supply the post code I tested.

Some small energy suppliers actually take their energy from bigger suppliers and re-brand it. The National Trust Green Energy, for example, comes from npower.

If we compare the above tariffs (the cheapest tariffs from the small suppliers in this area) with the cheapest dual fuel tariff available, npower beats them, coming top of the table at £526 per year. That's £81 cheaper than the cheapest small supplier, Utility Warehouse. In fact, all six of the big six have cheaper tariffs than Utility Warehouse. That's disappointing, as we'd all like an excuse to leave the big six.

Medium-energy users

Moving on, a medium-energy user uses 3,300 KWh electricity and 20,500KWh gas per year:

Medium-energy users

Supplier

Estimated annual cost

The National Trust Green Energy

£1,145

first:utility

£1,154

Sainsburys Energy

£1,159

Telecom Plus (Utility Warehouse)

£1,183

utilita

£1,209

Spark Energy

£1,310

The cheapest dual-fuel tariff is from British Gas. At £1,037 per year, this is £108 cheaper than the National Trust Green Energy. Again, all six of the big six are cheaper, provided you're on one of their latest discount tariffs, and not sitting on their expensive standard ones! E.ON's fixed tariff was second cheapest at £1,047. More on that tariff in a second.

High-energy users

When I see the phrase 'high-energy user', I think of my frenetic young nephew, who's like a bumblebee trapped in a car. Today, though, I'm using the definition of a household generating 4,950KWh electricity and 28,000KWh gas per year:

High-energy user in Guildford

Supplier

Estimated annual cost

The National Trust Green Energy

£1,565

first:utility

£1,574

Sainsburys Energy

£1,582

Telecom Plus (Utility Warehouse)

£1,635

utilita

£1,652

Spark Energy

£1,823

The cheapest tariff in this test is from E.ON. It's E.ON's fixed tariff version one, which unbelievably is still available. Read about it in Extremely cheap fixed-energy tariff! In this post code and for trapped bumblebee homes the estimated cost is £1,406pa, £159 cheaper than the cheapest small supplier.

The next cheapest, if you're not interested in fixing, is from npower at £1,441pa. Five of the big six were above all of the smaller suppliers, with just Scottish Power slipping beneath The National Trust Green Energy.

A disappointing result from the small suppliers, but we'll keep you updated if and when the position changes.

Note on using our comparison tool

We occasionally get people emailing us saying our figures are wrong and that the energy comparison tool is telling them to switch to the wrong tariff. We double-check these claims, but so far we've found that the error was made when the reader put information into the form.

I believe that lovemoney.com's tool is the most accurate, because it's the only one that allows you to enter in the precise details of your tariff. After entering four basic details on the first page, you'll get a very rough estimate of the savings you can expect. However, on the second page of the form you must carefully select the closest match to your tariff in the two fields called 'Who is your current supplier?'

If you select, e.g. EDF Energy Other Tariffs, the tool will then take you to an extra page where you can either select the precise tariff and version of the tariff, or enter your tariff details yourself (for example, the standing charge, the first and second unit rates, and the KWh threshold). That's why the tool is so accurate.

If, however, you simply select British Gas' standard tariff when you're not actually on it, the tool will skip the extra page. This is because it already knows the details for this tariff, as it's the same for everyone. The result is that your quote will be less accurate and you'll email me saying my guidance is wrong and I'm not fit to use a keyboard, which isn't true! So please enter your details as accurately as possible for your own benefit.

> Compare gas and electricity though lovemoney.com

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