Do you know why your gas and electricity bills are so high? Hannah Ricci reveals the true cost of appliances and shows how to slash your bill.

How much do you spend on your energy bills? The proportion of our income directed towards simply heating and running our homes is getting out of control for many households.

Despite price cuts throughout last year, the average annual energy bill still remains £327 higher today than in January 2008, at £1,230 a year – a whopping £23 a week.

With the purse strings already pulled tight, it’s not surprising we’re struggling to meet these high but essential costs. The number of people seeking help and advice regarding energy bills soared by 46% during 2009, according to the Citizens Advice Bureau.

In February British Gas announced it was cutting gas bills by 7% – but until energy companies pass falling wholesale prices onto customers as standard, it’s up to us to limit our energy usage to make the bills more manageable.

Moneywise investigates what could be inflating your energy bills, and the changes you could make to cut the size of your next payment.

Washing and drying clothes

Do you know how much your washing machine costs to run? Depending on the model you’ve got, it could cost as much as 23p per cycle.

This might not sound like much, but when you consider that the average washing machine is used for 274 cycles each year, according to the Energy Saving Trust, it could be costing up to £63 a year to run.

A simple step to minimise this cost is to start washing your clothes at 30 degrees instead of higher temperatures. This uses 40% less electricity and will shave around £10 off your annual bill. Modern washing powders and detergents work just as effectively at lower temperatures.

Generally, washing machines use the same amount of water and electricity regardless of the size of the load, so it makes sense to wait until you have a full load to get ‘value for money’ from your wash. Also consider using your machine’s economy cycle.

When your machine is ready for an upgrade, look at the energy efficiency ratings when shopping around and try to opt for recommended energy-saving models, which will typically use around 20% less energy than older models.

Tumble dryers are even more expensive than washing machines to run, with the least energy-efficient models costing up to 62p per cycle – if you use your dryer 148 times a year, that’s £92 on drying clothes alone.

Hanging your washing outside to dry whenever possible will slash this cost – the Energy Saving Trust says avoiding the tumble dryer during the summer months could shave £15 off the average energy bill.

When the weather’s not so good, make use of indoor airers and extend-able clothes dryers, assuming you don’t have a moisture problem in the house.

Lighting

Lighting accounts for around 20% of our energy bills, according to the Energy Saving Trust, so reviewing how you use your household lights could substantially cut your bill.

Leaving lights on when they’re not needed is an unnecessary waste, so the most obvious energy saver is to encourage everyone in your household to turn lights off when they leave a room.

If you haven’t made the switch already, swap all your bulbs for energy-efficient ones. They last up to 10 times longer than ordinary ones and use 80% less electricity.

By replacing all the remaining traditional bulbs in your home with energy-saving light bulbs, the Energy Saving Trust says the average household could save around £37 a year from their energy bill, and £590 over the entire lifetime of the bulbs.

Other tips include using desk and table lamps in areas where you need light rather than wasting energy lighting the whole of the room; and cleaning your lights regularly to avoid the build-up of dust and dirt on bulbs dimming the light.

Kettle and hob

How many times do you boil the kettle each day? The UK certainly lives up to its tea-loving reputation – we each drink an average of four cups of tea every day, according to the Tea Council.

In addition to putting the kettle on for tea, we’re likely to boil it a couple more times each day, perhaps for our evening meal and bedtime cocoa.

But research shows we tend to boil twice the amount of water we need every time we boil the kettle – wasting a huge amount of energy and money.

Cut this wastage and save 90 seconds each time you boil the kettle by measuring how much water you need with the mug or saucepan you’re planning to use, and pour this water into the kettle.

When cooking, always put lids on pots to help food heat up quicker and use less energy, and use the right size pan for the stove ring to avoid unnecessary heat loss.

Appliances on standby

Household appliances not only use electricity when they’re in use, they continue to consume power when in standby mode. It’s not a huge amount of energy, when you consider the overall cost of running an appliance, but if all your household appliances are left on standby the cost will certainly add up.

Data from Sust-it.net, which works out the cost of appliances based on the average cost of electricity, shows that a standard 32-inch flatscreen TV, for example, costs around £39 a year to power, plus an extra £2.50 if it’s left on standby.

Add to this the average digital set-top box, which costs around £4.80 in standby mode, and you’re paying out over £7 for two appliances when you’re not even using them.

Encouraging everyone in your household to turn all appliances off rather than leaving them on standby, could shave a huge chunk of your annual bill.

Heating and hot water

Heating water for use in taps, baths and showers makes up around 30% of the average household’s gas bill. This equates to around £200 a year – and may cost even more for households that use an electric immersion heater.

Helping your water stay hot for longer will save energy and money. The Energy Saving Trust advises insulating your hot water tank with a jacket to cut heat waste and your energy bill by around £35 a year. Also, insulating hot water pipes will save you £10 a year.

A standard shower uses around 40% less water than a bath. Older showers can be inefficient and waste energy, so if yours is pretty old, apply for a free ShowerSmart from Eaga, the UK’s largest supplier of heating and renewable energy.

It is a device that is fitted to the showerhead to regulate the water flow rate to 7.8 litres a minute – the equivalent of a powerful electric shower. This helps to save on the cost of both heating water and the amount of water used.

According to Eaga, this can lead to savings for the average family of about £30 a year off both energy and water bills (where metered).

Heating your home accounts

For a further 30% of the average annual energy bill, so pay attention to the temperature on your thermostat. Reducing your heating by just 1°C can cut up to 10% off your heating costs.

If your house does feel chilly, look at areas where heat could be escaping. In an un-insulated house 26% of heat is lost through the roof and 33% is lost through the walls, so loft and cavity-wall insulation is worth the investment.

Heat also escapes through the windows and doors, so draw the curtains when the temperature drops and make use of draught excluders.

New smart meter could transform energy usage

Figuring out exactly how much energy we use around the house is tricky, but it could get much easier with the introduction of new technology that will provide a breakdown of household energy consumption.

“Consumers are under pressure to reduce their energy bills for financial or environmental reasons, or both, but don’t understand how to,” explains Jim Donaldson, who has worked with Oxford University to develop a new smart meter, which will be integrated into a device called the Smart Hub.

“We have developed an energy monitoring system to automatically tell users which appliances are on and how much energy they are consuming, through a sort of itemised energy bill.”

Donaldson is the chief technology officer of Intelligent Sustainable Energy, a company set up last year to bring the new meter to market, and is in discussions with utility providers to integrate the hub technology into smart meters, which the government has announced will be fitted in all homes by 2020.

“It’s an easy concept to understand, and the information can be used to make changes in behaviour to reduce energy consumption and make more informed decisions when buying new appliances,” he adds.

Could switching energy supplier slash your bill?

In addition to how much energy your household consumes, your energy supplier and the type of plan you are on could also be inflating the size of your bill. If you have never switched before or haven’t done so in the past 12 months, it’s likely you could cut your bills by changing providers.

The energy market has been shaken up with the launch of two small suppliers, set to rival the big six that currently dominate the market. Launched in autumn 2009, OVO Energy and First: Utility immediately took the high ground to become the two cheapest players in the market.

Will Marples, energy expert at uSwitch.com, says: “First: Utility was the first supplier to offer all customers the chance to get a smart meter installed, putting householders in greater control of their energy usage.

OVO’s energy is 15% renewable and now it is positioning itself as the UK’s cheapest provider too.”

Switching suppliers is a simple process, and there are a number of websites that will do it all for you, including switchwithwhich.co.uk; energychoices.co.uk and uswitch.com.

Dig out a recent bill and enter your postcode at one of the sites to compare deals across suppliers. Opting for an online bill and paying by direct debit will secure the cheapest deals.

However, be sure to read the small print before you sign up with a new supplier. Which? Switch advises looking out for extra payments such as exit fees, charges for late payments, and whether you’ll be moved to a more expensive tariff when a discounted deal ends.

By Hannah Ricci, MoneyWise.co.uk

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