Standing Charge Tariffs Guide

What Is A Standing Charge? 

Your standing charge is a daily fixed amount applied to your bill that covers the costs associated with delivering energy to the property. The standing charge stays the same no matter how much gas and electricity you use.

 

Opting for a no-standing charge tariff can save you money if gas and electricity are used occasionally. With a tariff that has zero standing charges a supplier usually offsets this cost with a higher unit rate for fuel used. This could work out more expensive under normal energy usage. This guide will help you understand when it is beneficial to opt for a no-standing charge tariff and what to look for when selecting your next deal.

 

 

Is A No Standing Charge Tariff Good Value?

Each supplier sets their standing charges. The amount depends on the tariff, location and wholesale market. Business energy suppliers do not have a price cap on energy so they can set the rate at their discretion. However, the industry regulator Ofgem caps the amount suppliers can charge customers, known as the energy price cap. 

The current standing charge price cap is 60.12p for electricity and 31.41p for gas. This standing charge cap expires on 30 September 2024. This will then increase to 60.99p for electricity and 31.66p for gas for the period from 1 October to 31 December 2024. 

No Standing Charge Tariffs 

 

According to Statista, 62% of UK households surveyed claimed they worried about paying their energy bills.  With the increase in energy bills, many people in the UK are searching for ways to reduce consumption costs.

 

Naturally, many are considering tariffs with a low or zero standing charge. Whilst they offer benefits for certain types of users, energy could become more expensive for ‘normal usage’. 

Tariffs with no standing charge attached could save you money if the property is unoccupied for large amounts of time. This is because suppliers usually charge a higher unit rate for gas and electricity to offset the standing charge. 

 

What Is A No Standing Charge Tariff?

As the name suggests, a no-standing charge tariff will set your standing charges at zero throughout your contract. This means you will only be charged for the energy you use and will have no daily fee to pay.

 

Should homeowners switch to a no-standing charge tariff?

A no-standing charge tariff can be ideal for anyone who owns a property they will not be using year-round. When the property is not being used, there will be very few energy bills to pay.

 

However, you should bear in mind that your tariff will likely have higher energy unit rates for the gas and electricity you use.

 

Whether you can save money on your energy bills with a no-standing charge tariff will depend on your circumstances.

 

When comparing energy deals, it’s important to consider your full estimated costs for a better view of your expected bills.

 

Should businesses switch to a no-standing charge tariff?

A zero-standing charge tariff can be particularly useful for businesses which operate seasonally or for only a few days a week - if these tariffs are available. Due to the energy market being one of daily fluctuation, there may be times when energy suppliers pull these tariffs from the market. 

 

As business gas and electricity standing charges can often be higher than domestic charges, potential savings for businesses can be even greater if there is a zero, or very low standing charge.

 

However, as with domestic users, it’s important to bear in mind how much business electricity and gas you use. High-consumption businesses could end up paying more due to a higher unit rate on a no-standing charge tariff.

 

We've pulled data to let you know which commercial electricity and commercial gas tariffs have zero or low standing charges, and how long each contract is for. 

 

 

How Much Does A Standing Charge Affect A Business Electricity Bill?

Depending on your energy usage, the amount you pay in standing charges could be a negligible amount or a significant amount. For most SMEs, that our data shows use about 15,000 - 25,000kWh of electricity a year, these businesses can expect their standing charge to make up around 5% of their annual business electricity bill.

 

The table below shows this in more detail for businesses on a 2-year contract beginning on September 1, 2024. The table uses the midpoint of each usage band for prices, and standing charges, and the annual cost and percent contribution is calculated accordingly.

Can I switch to a zero-standing charge tariff with a prepayment meter?

If you have a prepayment meter at your property, you can switch to a no-standing charge tariff just as anyone else would.

 

The pros and cons would be very much the same as any other tariff. However, you should bear in mind that unit rates are often already higher on a prepayment tariff than other standard tariffs. Once again, checking your full estimated billing will allow you to quickly compare the best tariff type for you.

 

How to Switch to a No Standing Charge Tariff

There is no real difference in the process of switching to a no-standing charge tariff than any other energy deal. Most suppliers now offer a range of tariff options including zero standing charge plans.

 

When switching energy tariffs, it’s important to compare the full cost of any gas and electricity contract. By starting your comparison with Energy Helpline, you can easily view your full estimated bills.

 

To find out how much you could save, check out our energy comparison service to find the latest offers on the market right now.