Understanding Zero Standing Charge Tariffs
Utilising a zero standing charge tariff could save you a great deal of money if you are someone who lives in more than one home over the course of the calendar year. Many people are unaware that it is possible to acquire energy deals that do not have a standing charge attached to them, and finding the best deal on the market could shave a great deal off their energy bill in certain circumstances. Below is a guide about who these types of tariffs are best suited to, so that you can ascertain whether it is the right energy package for you.
This search may include tariffs that have a standing charge and not just zero standing charge tariff.
What are Zero Standing Charge Tariffs?
When breaking down the costs of your energy bills there are two different elements you are charged for; your energy usage based on your rate per unit, and your daily standing charge which is pre-determined and is applied for each day that your bill covers. This is regardless of whether you used any energy during this period, as this is a fixed amount that must be paid regardless.
However, there are a small array of zero standing charge tariffs on the market that are available to those who typically spend an extended period out of their home, which would mean that they would only have to pay for their energy when they use it.
The rate per unit is typically higher with these tariffs, but users do not have to pay for an energy bill solely comprised of standing charges and could make a substantial saving overall during the course of the year.
Moreover, zero standing tariffs utilise a ‘two tier’ pricing system in which users pay a higher rate up until a certain threshold of energy usage and then enjoy a reduction after this has been breached.
Advantages of a Zero Standing Charge tariff
- No standing charge so users only pay for what they use
- After a certain level of energy has been used, the higher cost on the rate per unit will go down, making it an attractive financial proposition to those who own more than one property
Disadvantages of a Zero Standing Charge tariff
- The prices for the rate per unit are typically much higher than standing charge tariffs
- Unsuitable for people who use a high level of energy in their home on a regular basis
Is a Zero Standing Charge tariff the right deal for me?
Ultimately, the suitability of a zero standing charge tariff for your energy purposes is dependent on how frequently you are in one of your properties. If you are someone who only has one residence, or spends longer periods of time in all your residences, then a zero standing charge tariff is most likely not for you because you will overspend on your energy due to the substantially higher rate per unit.
In these instances, the added costs of the higher unit rate will usually outweigh the savings you make from having no standing charge, which makes it a worse energy deal for you financially. However, if you are someone who has a secondary home that you only visit sporadically, then a zero standing charge tariff is worth considering as you will not be sent a number of bills over the year that are solely comprised of standing charge costs.
You can then enjoy only paying for your energy when you are residing in the property, and will be able to enjoy a lower rate after you breach the energy usage threshold identified by your provider.