If you take a look at your energy bill, you’ll most likely notice a ‘standing charge’ along with your gas and electricity usage.
But what exactly is a standing charge? And why do you have to pay it?
In this guide, Love Energy Savings answer common questions on standing charges and offer advice on whether switching to a no standing charge tariff could be right for you.
What is a standing charge?
A standing charge is automatically added to most gas and electricity bills. It’s a fixed daily amount that you are required to pay no matter how much energy you have used.
Essentially, this is a fee paid to your energy supplier for the service of supplying your property with gas and electricity.
The standing charge covers the costs incurred by your supplier including:
- Carrying our meter readings
- Keeping your property connected to the main gas and electricity supply
- Payments for government initiatives including help for vulnerable households and C02 emission reductions
How do standing charges work?
Standing charges will be listed on your energy bill at a daily unit rate. Those on a dual fuel energy tariff will pay both a gas standing charge and an electricity standing charge.
Since the Retail Market Review, all tariffs are now structured with a clear unit rate and a standing charge. The aim of this was to simplify energy contracts and make it easier for consumers to compare tariffs and find the best energy deal for them.
How much do domestic standing charges cost?
Your daily standing charge will depend on your energy supplier. Typically, domestic standing charges range from:
- 5p to 60p per day for electricity
- 10p to 80p per day for gas
Over the course of a year, these charges can add up to a substantial sum running well into the hundreds of pounds.
What is the cost of business standing charges?
The cost of business standing charges will vary depending on your supplier, the size of your business and they type of business energy contract you are on.
Business standing charges can cost between:
- 15p to 160p per day for electricity
If you are on a fixed price contract, standing charges may displayed on your business energy bill as either pence per day or pounds per month.
Are there any energy tariffs without a standing charge?
Yes. There are a few energy suppliers who offer no standing charge tariffs or set a rate of £0 on your bill.
Could homeowners save money with a no standing charge tariff?
The main benefit of a no standing charge is that you will only pay for the energy you use.
This can be ideal for anyone who owns a property they will not be using year-round, such as a holiday home. When you are not using the property, you will have little to no energy costs to pay.
However, choosing a no standing charge tariff will often mean you have to pay higher energy unit rates for the gas and electricity you do use.
Whether you can save money on your energy bills with a no standing charge tariff will depend on your individual circumstances.
Although high energy users would be unlikely to see savings, if your energy use over the year is relatively small, you could find savings with a no standing charge tariff.
Should businesses switch to no standing charge tariffs?
As with all energy tariff options, no standing charge business energy deals have their advantages and disadvantages.
Only paying for the energy you use can be particularly useful for seasonal businesses who may not operate at all for periods of the year. With a no standing charge tariff, you won’t be facing energy costs whilst the business isn’t operating.
Businesses which only open for a few days a week may also benefit from a no standing charge tariff.
However, as with domestic users, businesses will likely pay higher energy unit rates for the gas and electricity used. For high energy users, this comes mean an increase in your overall energy costs.
At Love Energy Savings, we have a team of business energy experts who can provide advice on choosing the right tariff when comparing business energy.
By switching your business energy with us, you will have a dedicated account manager to support you throughout the switching process.
How to switch to a no standing charge tariff with Love Energy Savings
At Love Energy Savings, we work with a wide range of suppliers to bring you the best possible choice when it comes to finding the right gas and electricity deal for you.
With our innovative energy comparison engine, you can even compare our best no standing charge tariffs.
For more tips and advice on finding the best energy deals from the experts at Love Energy Savings, take a look at the rest of our business and household energy guides.