E.ON: 8.7% power rate increase to come into effect from 2013

by James Martin II on December 11, 2012

UK electricity retailer E.ON will raise its prices for domestic customers by 8.7% from 2013, making it the only of the ‘big 6′ retailers to avoid putting their prices up in 2012–albeit just barely. The price hike will come into effect from 18 January next year. There was disappointment but little surprise at the news; E.ON’s move is just the most recent event in the ongoing trend of electricity price inflation in the UK.

E.ON’s rate changes will hit households reliant on gas slightly harder than those without it, as electricity tariffs are to rise by 7.7%, whilst gas prices will rise by 9.4%. By means of comparison, rates for customers of the other 5 of the ‘big 6′ increased by between 6-10.8% in the last months of 2012 (see the chart from the BBC below). The increases are associated with rises in the cost of transporting energy, as well as wholesale prices.

“We have held back from increasing our prices for as long as we possibly could and at the same time have worked hard to reduce our own costs as a business so that our customers can get the best price possible,” said E.ON head Tony Crocker said about the planned price rises.

Electricity and gas prices 2010-2013. Source: BBC

Electricity and gas prices 2010-2013. Source: BBC

Since 2011, household power prices have increased across the UK by around 23%, resulting in an ever-rising proportion of people undertaking power-rationing and energy efficiency measures at home to save money, according to electricity retailer comparison site uSwitch. Last year 3 out of 4 households said that they would turn do things such as turn down the thermostat and wear more wool to stay warm through the colder months; this year that figure was up to 9 out of 10.

Another electricity comparison site, UKPower.co.uk, estimates that household energy bills will increase by on average £94 annually for a typical household that paid £1,258 for their power in 2011. This will put an even tighter squeeze on families already feeling the impact of a sluggish economy and national austerity measures. UKPower goes on to further break down changes to standard tariffs by retailer:

British Gas: Increase of £76, up from £1,260

EDF: Increase of £130, up from £1,202

E.ON: Increase of £110, up from £1,260

NPower: Increase of £108, up from £1,244

ScottishPower: Increase of 19£, up from £1,349

SSE: Increase of £119, up from £1,235

Solar panels as a solution to rising prices?

In addition to the UK’s feed-in tariff, which helps the financial case for going solar, the rising cost of power is one of the main reasons for the recent dramatically rapid uptake of solar PV systems for homes in the UK. By creating their own power via a solar PV system, homes and businesses are able to significantly reduce their electricity bills. A well-priced 4kWp solar system of decent quality, for example, could save a household £800+ year, depending on how much of the power is sent into the electricity grid vs used on the spot.

Want to learn more about solar panels? Fill out the Solar Quote Comparison Request form to the right of this page to compare accredited solar installers near you, or contact us by phone or email:

sales@solarselections.co.uk

020 7205 2267

© 2012 Solar Selections Pty Ltd

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