There has been some rare good news for Irish consumers in recent weeks with energy providers virtually falling over themselves to roll out price cuts of between 10 and 30 per cent.
Flogas has become the latest company to announce a cut in the cost of its domestic electricity and gas promising savings of almost €900 a year to some of its customers. Other providers have boasted of savings of anywhere from €400 to €800.
While the price reductions are welcome, they have to be taken in context.
While a 30 per cent cut sounds good, the sheen comes off when you realise it comes after a 100 per cent price increase imposed over the previous two years. And that was the case irrespective of the company.
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The annual cost of heating and lighting a typical Irish home was around €2,000 in 2019 and around €4,000 in 2022. A 30 per cent price cut - and that is very much at the top end of the scale - on €4,000 still means consumers can expect to pay almost €1,000 on energy over the next 12 months than compared to three years ago.
That said, there are other ways people can try to cut their bills further.
Switching is the first step.
We have said it before and we will say it again, being active in the switching market will save you money. While the days of companies offering discounts of up to 40 per cent as an incentive to encourage people to sign up are long gone, there are still savings to be made by moving from Company A to Company B.
You won’t notice any difference in the quality of the service and won’t suffer any interruption in supply. You may, however, be able to knock 10 per cent off your annual bill making it a no-brainer. Rather than calling the providers, you could use one of the two regulated switching platforms - bonkers.ie or switcher.ie. You give them some basic information about your account and they do they work for you.
The next point to consider is where you are using your energy. Heating your home typically accounts for around 60 per cent of a domestic energy bill. Heating hot water is about 20 per cent and electricity is about 20 per cent. There might be some variations in the 60/20/20 rule but they are small.
Given that heating is the biggest drain on our resources - financial as well as natural - that is where to start.
Think about how you are using your heat and what you are heating and when. Turn your heat off a full 30 minutes before you plan to leave a room or your house or go to bed and turn it on 30 minutes before you plan to return or get up in the morning. Even the most basic of systems come with timers and thermostats so it should be easy to manage.
It is also important to recalibrate your expectations. Many Irish people have grown accustomed to warmer houses than might have been the case in times past. Children of the 1970s and 1980s - and earlier - will recall that houses were not heated to semi-tropical levels year-round and huddles round the fire or storage heaters were not uncommon while people were frequently sent to bed with hot water bottles because bedrooms were Baltic.
We are not going to suggest we return to the bad cold days but knocking just one or two degrees off your thermostat can add up to significant savings.
And remember that zonal heating is key. Turn off or turn down the heat in the rooms you are not in. There is no point, for example, in heating a home office if you leave it at 6pm and don’t return to it until 9am or if bedrooms are not in constant use make sure they are not being constantly heated.
Once you have regulated your heating to a level you are comfortable with you need to work out how to keep the heat in.
Using a Home Energy Saving Kit from your local library you can work out how and where most of the energy in your house is used and where the heat is leaking out of your house and then takes steps to plug the leaks.
There has been much talk in recent times about the grants available for deep retrofitting and heat pumps and solar panels but they will be of cold comfort to anyone looking at ways they can keep the lights on this winter. All these measures will save people money and make life more comfortable in the long run but with an initial outlay of many thousands of euro, they will not save in the short term.
It is a different story when it comes to the SEAI attic insulation grant. It will cover around 80 per cent of the total cost of insulation and lead to a payback within two years. And if you had your attic done in the 80s or 90s you might want to take another look at it because the technology has improved and having it redone should yield better results.
When it comes to hot water, keeping an eye on the clock rather than trying to fiddle with the temperature makes sense and use your immersion at your financial peril. If you have your immersion on for longer than your need it, it is a little like boiling your kettle over and over again because you think you might fancy a cup of tea at some point over the next six hours or so.
And then there are the appliances. The less time they spend heating water they cheaper they are to run so, use a shower and not a bath, and shorter showers are - obviously - cheaper than longer ones, so be quick.
What are the savings? If you get the timing, temperature and location of your heating right you could save around 10 per cent on the cost of energy and that works out at in excess of €300 for most Irish households. Any by being more judicious about how your heat your water and use it you could save another 5 per cent, or €150.
Another 5 per cent could be saved by the simple but essential step of servicing a boiler - once a year for an oil burner and once every two years for a gas boiler. Soot acts as a great insulator and the more soot left in your chimney the more you will spend on making your boiler work.
Pay close attention to your white goods and other electrical items. Don’t run your washing machine or dishwasher until they are full and then run them on the eco settings or lower temperatures. The simple act of washing your clothes at 30 degrees instead of the default 40 degrees will save you money.
On a one-off basis those savings will be negligible, but spread out over a year, they will add up. Similarly don’t leave any electrical goods on standby and spend just one minute less in the shower every morning. By taking all these steps you could reduce your energy consumption by over 10 per cent — which might see you saving in excess of €300 over a year.
And finally, have a look at your hot water tank and make sure it is properly insulated. By making sure the tank is properly lagged, you will be able to knock as much as 25 per cent off the annual cost of heating water.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
