If you’ve tried to use an energy price comparison website like USwitch, Go Compare or Compare the Market recently, you were probably left disappointed. Rather than a list of better-value energy tariffs, for some time these sites have only been able to offer an apology.
Why have all the energy price comparison sites paused their service, and are there any options for energy customers?
Why are energy price comparison sites not showing available tariffs?
Energy comparison sites use your estimated energy usage to compare existing energy tariffs to the default ‘standard variable’ tariffs customers are automatically placed on. These used to be some of the most expensive energy tariffs available. However, since 2019, these are actually the lowest-priced tariffs on the market.
As the default tariff is the cheapest available, energy price comparison sites are not finding any results when searching for a cheaper option. If you are on the standard variable tariff, or if you’re on the energy tariff that was in place when you first moved in, then there are currently no cheaper energy tariffs available.
This applies whether you’re using an automatic comparison or a bespoke service like Please Connect Me to find the best rates – the tariff in place by default will always be your cheapest option.
Why are standard variable tariffs the cheapest option?
In January 2019, Ofgem introduced a price cap on standard energy tariffs. This specified the maximum per unit cost and standing charge energy suppliers could charge customers who are on their default tariffs.
The price cap was initially introduced because standard variable tariffs were too expensive. At the time, it was a maximum charge, as energy companies competed among themselves to offer cheaper tariffs for customers to switch to.
However, not long after the price cap was first introduced, the wholesale cost of energy skyrocketed. This meant that energy suppliers raised their prices for their fixed-rate tariffs. However, they could not raise the prices of tariffs restricted by the price cap. Almost overnight, these plans went from the most expensive to the cheapest on the market.
Since then, the energy price cap and, more recently, the price guarantee, have raised steadily, but all UK energy suppliers have raised their fixed rate tariffs alongside this. Currently, there are no fixed rate tariffs available that are cheaper than the energy price guarantee applied to default plans.
When will new energy tariffs be available?
We’re constantly monitoring the energy market, waiting for a supplier to release a tariff that’s cheaper than the energy price guarantee.
While we have not yet been made aware of any plans, there’s a chance we may see new tariffs in the spring of 2023. The Energy Price Guarantee will increase on April 1st, and it’s possible we’ll see new tariffs released in response to this.
Otherwise, we’ll see new energy tariffs introduced when energy suppliers feel that the wholesale price of gas and electricity has stabilised enough for them to offer competitive pricing.
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