What’s included in a standard electricity bill? 

The realm of solar energy can be clouded with technical jargon, leaving many scratching their heads. Fear not, as we dive into the distinction between Watts (W) and Kilowatt-hours (kWh), unraveling the mystery to help you make sense of the energy landscape.

A standard electricity bill.

As we look at our home electricity bills, we are often frustrated: costs keep going up. In fact, over the past 10 years 

Average annual domestic electricity bills by various consumption levels’ from the Department for Energy Security and Net Zero, published March 2023.

There maybe short term cuts to prices, but the overall trend is upward – even if you discount the ‘crazy’ pricing spikes of 2022/3. 

Why is this happening and what makes up your electricity bill?  

There are 4 key elements: 

  1. Generators: These companies such as British Gas produce electricity from various sources, including natural gas, nuclear, and renewables. 
  2. Transmission Network Operators (TNOs): TNOs manage the high-voltage electricity transmission network, getting electricity from power stations to regional networks. 
  3. Distribution Network Operators (DNOs): DNOs oversee the low-voltage distribution networks that carry electricity to homes and businesses. 
  4. Electricity Suppliers: These companies purchase electricity from generators and sell it to end-users like me and you. They also handle billing and customer services. 

What You’re Likely To See On Your Electricity Bill:

  1. Unit Rate: This is the cost of each kilowatt-hour (kWh) of electricity you use. It’s often divided into two rates: a day rate and a night rate (cheaper during off-peak hours). 
  2. Standing Charge: A fixed daily fee covering the cost of maintaining the energy infrastructure and customer service. 
  3. VAT (Value Added Tax): The standard rate of VAT applies to your energy bills. 
  4. Other Charges: These could levies and network charges that cover the costs of transporting electricity. 

How Your Usage Is Measured:

Your electricity usage is measured in kilowatt-hours (kWh). Your meter records how much electricity you use, in half-hourly intervals for smart meters or less frequently for older meters. 

Different Tariffs:

Electricity suppliers offer various tariffs, including fixed-rate, variable-rate, and green tariffs. Over 2022, the level of energy crisis reached a point that many fixed rates were completely withdrawn from the market, causing significant issues for businesses and consumers.

Why Rooftop Solar Electricity Is Extra Efficient.

Apart from its obvious green credentials, rooftop solar is highly efficient. About 10% of electricity produced from power stations is lost during transmission – accounting for around 1.5% of UK greenhouse gas emissions. By putting solar on your roof and using it in your home, you do not have any electricity losses. 

Rooftop solar also is not subject to the same levies and taxes of Grid electricity – in a sense you get/pay for the ‘raw’ clean and green electricity. 

Check to see if solar could work for you.

Related Posts