New energy supplier launches and it undercuts Ofgem price cap
A new energy supplier has launched in the UK with an electricity deal that undercuts the Ofgem price cap.
It marks the first new energy company to enter the market since wholesale prices rocketed.
Fuse Energy is offering a new electricity tariff which works out around £1,012 a year for a direct debit household with typical use (2,900kWh a year).
This undercuts the Ofgem price cap by around £55 - under the price cap, electricity costs on average £1,067 a year.
Based on these figures, a typical household would save around £55 - but keep in mind, the exact amount will depend on how much energy you use.
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The savings come from lower unit rates and standing charges.
The electricity unit rate charged through the Ofgem price cap is 30.11p per kWh on average - there are regional differences - while Fuse Energy is 29.31p per kWh.
The standing charge, meanwhile, is 52.97p per day on average through the price cap, while Fuse Energy charges 44.3p a day.
Standing charges are the daily fee you pay to have your home connected to the grid.
The tariff offered by Fuse Energy is variable, which means it can go up or down - although it can’t exceed the Ofgem price app.
You’ll pay by direct debit based on the electricity you used the previous month - which means how much you pay will vary slightly each month.
You cannot pay on receipt of bill, nor does Fuse Energy offer prepayment meters.
Fuse Energy is an electricity-only supplier, so if you have a gas supply, you’ll need to sign up to another firm for your gas.
You can also only sign up to Fuse Energy through its app.
If you do decide to make the switch, there are no early exit fees on this tariff.
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In its analysis of Fuse Energy, consumer website MoneySavingExpert.com said: “On the surface of it, Fuse is a no-brainer compared to sticking on the price cap.
“The worst that can happen from a cost perspective is that the tariff increases to the same level as the price cap, which is no worse than being on any other price cap protected tariff at present.
“There are also no early exit fees on this tariff, meaning you can switch elsewhere at any time penalty-free.
“You do, however, need to balance the fact that it's electricity-only and that it's new company, which isn't tried and tested, and we don't know how well it will cope with demand.”
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