With fixed energy tariffs falling to their lowest point in recent years one cannot help but ask how the falling prices affect me?
Despite duel fuel tariffs pricing as low as £950 in some instances, most customers are not reaping the benefits.
The majority of consumers have not switched tariffs and as a result, are paying on average as much as £1,249 per annum on their bills. Certainly it goes without saying that the falling wholesale costs of energy do not guarantee lower energy bills.
Energy bills are affected by a whole range of factors that are not limited to the price of wholesale costs alone. Managing these essential costs can be a nightmare without the right tools and expert knowledge.
The 5 reasons why your energy bills could rise in 2015:
1. Price freeze fears
Ironically price freeze suspicions have led to price upsurges. Ed Milliband’s proposed 2017 price cap by has prompted worry that profits might be squandered for many of the major energy firms-leaving many unwilling to cooperate. Price freezing may also leave many consumers stuck in expensive tariffs for extended periods, prompting further out lay.
2. Falling wholesale costs
Despite the sudden fall in costs by over 20pc in 2014, customers are not set to feel the full benefit as energy firms stubbornly cling onto profits. Although Ofgem claims that savings will eventually be passed onto consumers, the effects will not be felt straight away as energy companies fiercely compete on price.
3. Pressure from smaller firms
Newcomer so-called ‘challenger firms’, such as Dual Energy, are set to pressurise larger firms on price continually – seeing some of the major company’s prices fall but no comprehensive shift across the board.
4. Other factors we can’t predict
An over reliance on gas imports, the need to replace ageing power stations and environmental targets are all factors that are likely to escalate energy prices – but ones that we cannot accurately predict. Consumer dependence on gas in particularly is an issue – seeing an increase of 60pc between now and 2020 when coal-fired power stations are set to close.
5. Green energy incentives
The government led initiative is set to add an additional £91 to annual bills but set to increase further as more people take advantage of the scheme.