There are 2 fuels to choose from when it comes to heating your home – Gas and Electricity. So which option is cheaper? What are the pros and cons of the two fuels?
Unfortunately, the answers to these questions are not as simple as they look, but here is all the important information you need to know in regards to comparing the two fuels.
Gas vs Electricity?
Households have the option to purchase two different forms of gas for their household. Natural gas, which is drawn from the mains gas network, and is the most commonly used method, and liquefied petroleum gas, also known as LPG.
Natural gas is the more affordable and effective option and can be used for water heating, cooking and cleaning.
Electricity on the other hand, is a lot more accessible and can be used for many more applications, including the ones mentioned above. Whilst many households do not have a natural gas connection, electricity is much easier to supply and access. So what is the best option: have an electricity supply only, or is it cheaper to opt for both fuels in your home?
On average, a unit of gas costs 4p/kWh (kilowatt hour) – while electricity costs on average of16p/kWh. In that essence, electricity is four times the price of gas.
But when comparing the two fuels, there are other factors to compare.
Whilst the average unit of gas is far cheaper than compared against electricity, gas boilers are far more expensive. These also cost more to maintain and repair, compared to the equivalents for electricity. In addition to this, gas boilers are not totally efficient. This means the even the newest gas boilers would not offer the same efficiency that a modern electricity boiler would.
A standard electric heater will convert 1 kWh of heat, and thus are 100% efficient. However, this is not the case with gas boilers, as even a newly fitted boiler only being 90% efficient.
Despite this, with the average gas unit rate being much cheaper than that of electricity, natural gas can still be seen as very economical for heating purpose. This also accounts for 80% of the UK’s home heating, with over 8 million gas boilers sold every year.
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However, electricity is a very versatile form of fuel, with this being used for numerous applications throughout millions of homes in the UK.
Electricity is generated at power stations which is connected to the national transmission and regional distribution networks. Transmission networks run high voltages of electricity through long distances, with distribution networks running at much lower voltages, taking electricity into homes and businesses across the country.
For information regarding The National Grid and the process of supplying energy to properties and businesses, read our guide here (https://lookaftermybills.com/blog/the-national-grid-who-are-they-and-what-do-they-do/)
This is bought in the wholesale market, with suppliers purchasing this and then selling it to customers, in a competitive market. Ofgem (https://www.energy-uk.org.uk/energy-industry/the-energy-market.html#:~:text=Distribution%20networks%20run%20at%20lower,second%2Dby%2Dsecond%20basis.) regulate the energy markets, with their role being to ‘protect the interest of consumers by promoting competitions where appropriate and needed.
Technologies involving electricity heating has developed greatly over the last few years, with more and more sustainable and energy efficient options available to the wider public market, with this not being portrayed to a similar level for natural gas fuels.
Installation and maintenance costs are much lower than that of gas, and also tend to last longer on average, with technologies advances also increasing capability and reducing price.
Latest technologies advances include more effective and faster components, fascinating innovative thermal features, and a greater control over programming.
What’s cheaper, gas or electricity?
Gas energy is much cheaper to run than electricity on a regular basis, but the overall costs of installation, maintenance and running expenses tend to favour electricity, with the average lifetime of products also outlasting that of gas.
Electricity providing 100% efficiency also provides optimum value, meaning all electricity you use and purchase converts into heat.
How does renewable energy match?
Renewable energy alternatives can tend to be more expensive for upfront costs, with biomass boilers and heat pumps tending to be the most efficient and best heating options from renewable sources.
Heat pumps tend to generally have a coefficient of an estimated of 3.5, meaning every 1 unit of electricity would provide 3.5 units of heat. This brings the overall costs alongside gas heating.
Energy Tariffs explained
With there being hundreds of different energy tariffs available with energy suppliers, it can be a tough job finding the best deal for your lifestyle and property type.
Find out about the different types of energy tariffs below:
Standard Variable Tariff (SVT) –
A standard tariff with your energy supplier would be the default deal, and you are automatically put on this once your tariff or contract ends. This is the most expensive deal suppliers would offer, and because of this, it is advised you do not remain on this deal for a large period of time, as this may mean you end up paying way over the top, despite your usage not being as high.
A variable deal could also mean the unit rates that are you charged for consuming gas and electricity could change whilst you are on this plan by the suppliers, and this may be due to the cost of wholesale energy prices fluctuating.
Fixed rate tariff –
A tariff that has a fixed rate on the other hand would mean the unit prices would not change during the duration of your contract. Due to this, your energy bills would only increase or decrease depending on your energy usage and would not be affected by wholesale price rises or falls.
Duel Fuel –
Duel Fuel tariffs would cover your electricity and gas on the same contract. This would not only be convenient as you would only have one supplier for your fuels but could also work out being cheaper than having two separate deals.
A prepayment tariff would require having a prepayment meter and would mean any energy wanting to be used would have to be topped up beforehand. This can be helpful for individuals that want more control over their energy usage. Energy can be topped up via cards/keys either through an online account with your energy supplier, or in local convenient shops.
Economy 7 tariffs –
Economy 7 tariffs are deals that would charge you different electricity rates for consuming energy during the day and night. This would require an economy 7 meter and would allow you to have 7 hours of cheap energy usage during the night, but a more expensive unit rate during the rest of the day.
For more information regarding economy 7 meters, and the benefits of this, visit out economy 7 guide here (link).
Green Tariff –
These tariffs use renewable energy sources, which would mean the energy you consume would be environmentally friendly. However, using this form of energy can affect the unit rates that you would pay, and may mean it may not be the cheapest available in the market.
How do I compare energy tariffs –
When comparing energy tariffs, the key information to look out for would be the unit rates and monthly cost you would be paying with your energy supplier. Your energy usage also is crucial within this comparison, as this would determine which tariff and supplier would give you the biggest saving.
However, it is essential to compare your energy tariff every year to ensure you are on the best deal possible. Once your current contract ends, your suppliers would automatically place you on the standard default tariff, which can be the most expensive the suppliers would offer.
This is why auto-switching is changing the game!
Here at Look After My Bills, we’re confident that auto-switching is the way forward. Switching your energy bills automatically every year not only means less effort and hassle for yourself, but means you are able to save money year after year, without having to compare and research hundreds of energy tariffs yourself.
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For more information about why auto-switching is revolutionising the energy industry, read our guide here: (https://lookaftermybills.com/blog/what-is-auto-switching/)