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Understanding Energy Standing Charges

Understanding Energy Standing Charges

If you take a good look at your energy bill you will notice energy standing charges. These standing charges on you energy bill may not be easy to understand. To assist you in this regard, below are some instructions and tips that will help you grasp this part of your bill as well as decide if an energy plan without these charges may be more beneficial for your household.

What are Standing Charges?

First and foremost you have to familiarise yourself with the concept of standing charges. They include fixed costs that are incurred to ensure a regular supply of gas or electricity to your home. These charges also encompass costs of maintenance services, conducting metre readings, linking your home to the energy powerhouse along with other similar services. The amount you pay as your standing charges is partially assigned to government programmes for supporting unprotected homes as well as seeking out environmental friendly solutions.

How a plan with standing charges works?

Now that you are aware of standing charges and the reasons they are charged, as mentioned above, you need to know how these charges work. Owing to the Retail Market Review (RMR), every energy tariff now comprises of a standing charge, which is a method initiated to ensure that all energy plans stick to a similar price strategy thereby allowing consumers to evaluate all energy tariffs available in the market and choose the most suitable one depending upon their energy consumption.

You should take into account that there are also some energy providers whose standing charges are set at £0. Majority of the energy suppliers do have standing charges barring a few, and if you are subscribed to such an energy plan you will just see the standing charge of £0 mentioned in your bill without having to pay it.

Is an energy plan without standing charges more reasonable?

If you are wondering whether it will be advisable for you to switch to an energy plan without any standing charges, you may need to reflect on certain factors. Generally, energy tariffs with standing charges are comparatively inexpensive and hence make a better choice than a plan without it. The fixed tariffs have high standing charges with low cost per unit of energy consumed, whereas if you select a plan without standing charges, the cost per unit energy will be relatively high. In certain circumstances, an energy plan with £0 standing charges is preferable, such as, when you own a large house that remains unoccupied for a long time during the year.

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