Martin Lewis: Why are energy standing charges so high? What can be done

CSI_Yorkshire

keef-WhatStandards said:

Are there no tariffs that offer no standing charges now? What about E.org who advertise this on their prepayment scheme? Is this a con?

There are a few tariffs that offer no standing charges.  They just hide the standing charge in a much bigger unit price for the first 1 or 2 units each day - so you pay it but think you haven't.

amsquared

Just got new quotes for Electricity and Gas from Sainsbury and Octopus for central Scotland.

Sainsbury Electricity 61.67p per day - up 144% from July 2021 - Octopus 60.02p per day in August 2023

Sainsbury Gas 29.11p per day - up 8% from July 2021  - Octopus 27.47p per day in August 2023

CSI_Yorkshire

amsquared said:

up 144% from July 2021 

Can you think of anything that's happened since July 2021 that might have affected things a little?

Lano4606

QrizB said:

Tony_H_3 said:

The one thing I haven't seen mentioned is the detrimental effect it has on the solar panel and feed in market, I seriously think the high standing charge exists to prevent anyone (e.g. a customer) from profiting from this market.

On the contrary, there are plenty of people making comfortable profits from their solar panels. Take a look in the "Green and Ethical" sub-forum.

Here's an example from early April (not high summer) where one of the regulars was making almost £5 on a good day:

I just had to join this forum to discuss this one. Context please! Why is it that some feel the urgent need, I don't know why, to cite one isolated example and believe that is sufficient to discredit a comment. Some got in early and got the attractive FIT rates while I would suggest the great majority of people who are on FITs do NOT. Tony H is quite right and you need to justify your comment with where that particular person is on that curve. That individuual could just be gloating about how clever they were to get in at an early FIT level which I think was something of the order of maybe 10x what it was at the end. The other point I would add to Tony H's is that it isn't so much about "profiting" but more recouping for the outlay. The current rate is miserable and in no way reflects the market wholesale rates that the utilities would be paying so effectively getting the kWh for pennies and creaming a large profit at the other end. And therein lies another of the real reasons as well as not wanting it to seem too attractive to adopt panels at home. If the FIT rate was better aligned with the wholesale market rate then you would see those with panels at least making a reasonable amount to go toward paying them back for what is not an insignificant outlay. Both this government and the utility companies do not want that to happen. It is an industry scam at the expense of the consumer once again.  

Spoonie_Turtle

Lano4606 said:

QrizB said:

Tony_H_3 said:

The one thing I haven't seen mentioned is the detrimental effect it has on the solar panel and feed in market, I seriously think the high standing charge exists to prevent anyone (e.g. a customer) from profiting from this market.

On the contrary, there are plenty of people making comfortable profits from their solar panels. Take a look in the "Green and Ethical" sub-forum.

Here's an example from early April (not high summer) where one of the regulars was making almost £5 on a good day:

I just had to join this forum to discuss this one. Context please! Why is it that some feel the urgent need, I don't know why, to cite one isolated example and believe that is sufficient to discredit a comment. Some got in early and got the attractive FIT rates while I would suggest the great majority of people who are on FITs do NOT.

If I'm not mistaken, the word 'flux' next to those figures in the screenshot means they're on Octopus Flux, a relatively new tariff which is very much definitely still available.
https://octopus.energy/smart/flux/

Incidentally if people with excess energy from solar panels were not connected to the grid infrastructure, they wouldn't be able to get paid at all.  So paying the standing charge to be connected, using the infrastructure, is what allows them not just to recoup their investment quicker but also, possibly, profit.

QrizB

Lano4606 said:

QrizB said:

Tony_H_3 said:

The one thing I haven't seen mentioned is the detrimental effect it has on the solar panel and feed in market, I seriously think the high standing charge exists to prevent anyone (e.g. a customer) from profiting from this market.

On the contrary, there are plenty of people making comfortable profits from their solar panels. Take a look in the "Green and Ethical" sub-forum.

Here's an example from early April (not high summer) where one of the regulars was making almost £5 on a good day:

I just had to join this forum to discuss this one.

You've certainly chosen an interesting time to comment on an eight-week-old post.

Lano4606 said:

Context please!

As Spoonie_Turtle has pointed out, the graphic identifies the tariff as Flux - an Octopus tariff.

Lano4606 said:

Tony H is quite right and you need to justify your comment with where that particular person is on that curve. That individuual could just be gloating about how clever they were to get in at an early FIT level which I think was something of the order of maybe 10x what it was at the end.

Octopus Flux was introduced this year and is open to any household with solar panels. No need to have joined a closed scheme a decade ago. There's a fifty-plus page thread on it here.

Gloating would be me pointing out that I'm on an early-2012 FIT.

Lano4606 said:

The other point I would add to Tony H's is that it isn't so much about "profiting" but more recouping for the outlay. The current rate is miserable ...

"Miserable" makes me think you're looking in the wrong place.

It currently costs about £1.20 to install a watt of solar PV on your roof, carport or gazebo (potentially a fair bit less if you avoid the MCS tax). In a good-but-not-exceptional location, that watt of solar panel will generate 0.9kWh of electricity per year, on average.

You can currently get at 15p/kWh for your export with Octopus Outgoing Fixed, potentially more than that on Octopus Flux. Your 0.9kWh is thus worth 13.5p (and that's ignoring the ~25p it's worth if you use it to replace power you would otherwise have used from the grid).

At 13.5p per year, you will pay for your solar panels in nine years, an 11% return.

(I've used Octopus tariffs as examples, but eg. Scottish Power also has double-digit export tariffs. There's a comparison table here which turns up if you Google for best UK SEG tariffs.)

Lano4606 said:

If the ... rate was better aligned with the wholesale market rate then you would see those with panels at least making a reasonable amount to go toward paying them back for what is not an insignificant outlay. Both this government and the utility companies do not want that to happen.

You'll hopefully see from the examples posted above that your concerns are misplaced.

Lano4606 said:

It is an industry scam at the expense of the consumer once again.  

There is no scam here.

bristolleedsfan

Leaving a Sunday thought for consumers who seemingly spend a lot of time on forum batting off other consumers who are not happy about rocketing electricity standing charges.

Might this pave the way for domestic no standing charge tariffs to make a comeback.?

jaceyboy

bristolleedsfan said:

Leaving a Sunday thought for consumers who seemingly spend a lot of time on forum batting off other consumers who are not happy about rocketing electricity standing charges.

Might this pave the way for domestic no standing charge tariffs to make a comeback.?

Bloody hope so...

[Deleted User]

jaceyboy said:

bristolleedsfan said:

Leaving a Sunday thought for consumers who seemingly spend a lot of time on forum batting off other consumers who are not happy about rocketing electricity standing charges.

Might this pave the way for domestic no standing charge tariffs to make a comeback.?

Bloody hope so...

So does adding 24% to the unit charge for an average Ofgem consumer work for you? Or are you hoping, as many do, that someone en-high is just going to abolish standing charges and leave unit charges as they are? 

FWiW, I think that the welfare element of the SC should be State measured and funded, and grid charges should be added to unit costs. However, this still leaves costs such as SoLR; green taxes etc that have to be recovered. Ofgem could of course do away with SoLRs and consumer credit protection and leave consumers to fend for themselves when a supplier goes bust. I doubt that is going to happen anytime soon.

schmorgs

I got a letter from British Gas today congratulating me on signing up to their standard variable tariff (I didn't but hey), and that energy prices are coming down in Oct.

The Gas and Electric unit price is down approximately 10%, but the Electricity standing charge is going up 40%.  

I don't pretend to understand all the mechanics of what this covers, but all they have done here is decreased energy cost (because they have to) and increased standing charge (because they can).

Shocking (pun intended)