How to reduce electricity costs
Electricity costs can be shocking
One cost that continues to put pressure on our households, is utility tariff increases. Given that most families are now home for extended periods, their personal energy use would have increased. Added to this, are the increased costs that we often experience during winter.
The power is in your hands
Reducing your electricity costs might be a quick win in improving your monthly budget. With many households refocusing their budgets due to changing incomes and expenses, there is no better time than now to look at where to cut costs. While you may already have reduced spending on luxury items as well as those easier-to-manage costs, you have probably overlooked your electricity bill. And, electricity is often a large cost.
We have outlined a few steps that can help you maintain healthy finances by managing electricity bills, and therefore, your budgets, sensibly.
The big question is: Do you understand your electricity bill, and have you validated this?
Your account number, service address, where your electricity meter is located and the meter number are all unique identifiers for your electricity account. Confirm that this information is correct. As silly as it might seem, mistakes such as being charged for your neighbour’s consumption, do happen. This information should also be kept at an easy reach, as it is usually required as a reference when making a payment or querying a problem on your account.
Your electricity bill is made up of several costs. The utility provider generally bills you in terms of two methods (fixed and variable charges), by which your electricity tariff structure is defined. Some of the jargon used to describe these costs can be rather confusing. Find some of the key jargon and descriptions on a typical bill in the table below.
Key jargon and descriptions that you would find on a typical bill:
The service charge is the cost per day/month that is charged for providing you with electricity (including the associated administration and maintenance).
Active energy charge
The total use measured in kilowatt-hour (kWh), how much electricity you have consumed (or an estimate of how much you have used) between your previous bill and your current bill.
Network demand charge
This is a charge that varies on a month-to-month basis and is charged on the actual demand measured in kilovolt ampere (kVA). Demand charge is the highest actual kVA recorded over a 30-minute period during the billing period.
The simplest method of analysing your bill, is by applying this easy formula for each of the items being billed, for example, kWh consumption x rate = cost (100kWh x R1.20 = R120.00). If the meter reader cannot access your meter, you would normally receive an estimated reading to calculate your bill. In this case, you will be billed based on a three-monthly consumption average. Pay careful attention and record the period in which the bill was estimated – it will be clearly stated on your bill. The total charge for the month in which your meter is read will be the actual metered amount and a credit will be passed if the previous estimate is higher, and vice versa.
Understanding your electricity bill and your energy consumption will help you to assess your energy use patterns and levels, so that you can begin to make sense of the necessary information that you need to monitor your consumption.
Do some simple comparisons. For example, by comparing your use from the same period in the previous year, you can get a picture of your electricity consumption during the different seasons. If your use is higher in winter or summer, you might want to look at the reasons and some options for reducing it.
In winter, your electricity costs are likely to be higher. Look at a mix of options to reduce your electricity costs. This might include using thicker bedding so that you don't need to leave the heating on overnight, heating only the rooms that you are using, sealing draughts and cracks with simple window and door tape, and investing in a more energy-efficient heater if your current model is using too much power.
Geysers can sometimes account for up to 40% of electricity consumption and so, installing a timer or a more efficient geyser (gas or solar) can save you a large portion of your electricity bill in the long run. Making some simple changes to the way that you use energy in your home, can help you save.
There are many ways to reduce electricity costs in your home. Some are simple habits and others could cost you initially, but the savings are well worth it.
Sustainable living is all about living smart – using less energy and paying less. We have a number of finance options that can help you make your home cheaper to run and smarter to live in. And, best of all, you’ll also reduce your carbon footprint! So why not live smart and pay less?