The A-Z of Energy Terms Explained

Every industry has its own jargon. The energy sector is no different but that can make it difficult for everyday consumers to fully understand things like their bills, discounts, incentives or where to turn for help.

For those times when you look at your energy bill and wonder, “What does that mean?!” we’ve put together descriptions of energy-related terms, from A to Z.

 A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z

A

  • Annual statement – this is a statement from your energy supplier that gives you information about how much gas and/or electricity you’ve used in the last year, in kWh and £s. It will also tell you the name of your tariff and when your plans ends (if applicable). The information provided should make it easier for customers to compare tariffs to get the best energy deal.

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B

  • Back-billing – not all energy bills are accurate and sometimes, as a result of undercharging, suppliers issue a back bill or “catch up” bill. If the error was caused by the supplier, the customer can’t be charged for energy used more than 12 months before the corrected bill was issued.

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C

  • Cold weather payment – this government scheme provides vulnerable customers with a £25 boost during very cold spells (lasting at least 7 days) to help with heating costs. If you’re eligible to get a Cold Weather Payment, you’ll be paid it automatically, as eligibility is usually linked to benefits.
  • Credit (CR) – when you pay more to your supplier than the amount of energy you’ve used, you build up a credit. This is money that the supplier owes you but the balance is generally carried over to your next bill.

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D

  • Debit (DR) – this is the money you owe your supplier and is the opposite of a credit. You may build up a debit by paying estimated bills that are lower than the energy you actually use or by not paying a bill. If a debit continues to grow, a supplier may suggest increasing payments to catch up.
  • Dual fuel – if you use gas and electricity and they are with the same supplier, you have a dual fuel tariff. Some suppliers may offer discounts for dual fuel customers but it’s a good idea to do a price comparison before combining your accounts.

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E

  • Economy 7/Economy 10 – these are a type of tariff most often associated with households that use electric night storage heaters. More recently, customers who charge electric vehicles at home overnight may also be on an Economy 7 tariff. A special electricity meter provides a day (on-peak) reading and a cheaper night (off-peak) reading. The off-peak rates are available for 7 hours or 10 hours, depending on the tariff. If you don’t know the times that the off-peak rates are offered, speak to your energy supplier.
  • Energy Company Obligation (ECO) scheme – this government energy efficiency scheme is designed to reduce carbon emissions and tackle fuel poverty. People in receipt of certain benefits may be eligible for free or subsidised insulation and/or heating measures. Support is available to all housing tenures although eligibility for improvements depends on numerous factors.
  • Energy Efficiency – this refers to generating the same output with less energy. LED lightbulbs, for example, are more energy efficient than incandescent (old-style) lightbulbs because they provide the same amount of light but use a lot less electricity. It comes down to doing more with less.
  • Energy Performance Certificate (EPC) – properties that are built, sold or let require this certificate that indicates how energy efficient a home is on a scale from A (very efficient) to G (very inefficient). UK homes typically achieve a D rating on average. An EPC can help prospective buyers and tenants determine if the property is difficult to heat and how much they might spend on energy bills. Landlords are no longer able to lease a property with an EPC rating below an E. The EPC also recommends ways to improve the energy efficiency of a home.
  • Estimated bills – unless you are diligent about providing meter readings to your supplier or have a smart meter installed, most of your energy bills are probably estimated. Suppliers must make a best guess at how much energy you’ve used in the billing cycle and charge you accordingly. That means you might be overcharged or undercharged, which may lead to nasty surprises later on. See also credit, debit and back billing.
  • Exit fees – fixed rate tariffs often come with penalties for leaving your tariff before the end of your contract. The fees range in price but typically cost about £30 per fuel to leave early. That means that if you are a dual fuel customer, you may be charged £60. Some suppliers may waive this fee if you ask to switch to another of their tariffs. And if you’re within the last 49 days of your fixed-term contract (known as the “switching window”), you can switch tariffs without incurring a charge.
  • Extra help unit – this team of specialist Citizens Advice caseworkers provide advice to vulnerable customers with energy complaints. It is an alternative service to the Energy Ombudsman and customers must first be referred by the Citizens Advice Consumer Service.

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F

  • Feed-in-Tariff (FiT) – this government scheme pays people for the electricity they generate from certain renewable energy technologies, like solar PV and wind turbines. The government have announced plans to scrap the scheme after 31 March, 2019.
  • Fixed rate – this energy plan provides customers with a set unit rate for the duration of your plan. That is, the cost of each unit of energy you use will stay the same for a set amount of time, even if your supplier decides to hike prices for their other customers.

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G

  • Green Deal – these were are government grants and loans for eligible home energy efficiency improvements. The main measures available were are boiler upgrades and insulation. While there were are no upfront installations costs, repayments were are linked to energy bill savings. The Green Deal stays with the property, so if you move somewhere that has a Green Deal Loan, you’ll be charged a fee on your electricity bill to pay back the loan. An EPC will be able to tell you if it’s a property with a Green Deal.

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H

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I

  • In-Home Display (IHD) – this device goes hand-in-hand with smart meters and is able to help customers manage their energy use. It can show you how much energy you use in real time, how much it’s costing, the name of your tariff, historical data and much more. Customers can also set alerts and warnings to keep track of their usage. For more details, see ‘smart meter’ section below.

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J

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K

  • Kilowatt-hour (kWh) – this unit of energy is what energy suppliers use to measure how much gas and/or electricity you’re using. You can compare tariffs that suppliers offer by looking at what they charge per kWh (but make sure you also look at their standing charges).

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L

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M

  • Meter Point Administration Number (MPAN, Supply Number or S-Number) – this 21 digit reference number is used to identify customers’ unique electricity supply points (usually individual meters). You’ll find this number on your electricity bill and on your meter.
  • Meter Point Reference Number (MPRN or M-Number) – this 11 digit reference number is used to identify customers’ unique gas supply points (usually individual meters). You’ll find this number on your gas bill and on your meter.

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N

  • Network operator – these networks are responsible for the electric cables and gas pipes outside a consumer’s home. These are the people to call if you experience delivery problems, for example, if your power goes out. You can find out who your network operator is here. They are separate to the utilities.

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O

  • Ofgem (Office of Gas and Electricity Markets) – this is the government regulator (although not a government entity) for the gas and electricity markets. They make decisions on things like price controls and have the power to enforce their decisions. When comparing tariffs, for example, Ofgem has a list of approved switching sites that show prices and options that are unbiased and fair.
  • Ombudsman – if you have a complaint with your energy supplier that cannot be resolved, one option is to escalate the complaint to the ombudsman. They can help resolve your complaint for free. The best place to start, however, is a conversation with your supplier, Citizens Advice and/or us.
  • On-peak / off-peak – these refer to specific times of the day when electricity or gas is either more or less expensive, respectively, and typically coincide with times that homes and businesses use more or less energy. Generally, off-peak cheaper energy is offered at night, e.g. Economy 7 electricity tariffs or on weekends, e.g. time-of-use tariffs, while on-peak dearer energy is provided during the weekday.

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P

  • Prepayment meter – this is a type of pay-as-you-go energy meter, where a key or card is used to add money to the meter to pay for energy before it’s used. You may even be able to top-up over the phone or online. Most of these meters offer ‘emergency credit’, which allows users a bit of time to top-up if they run out of prepaid credit. If customers with credit meters have accrued significant debts with an energy company, the supplier may attempt to install a prepayment meter to recoup the debt over time. A supplier can’t install a prepayment meter if it wouldn’t be safe or practical to do so. You can still switch supplier with a pre-payment meter, even with debt up to £500. Ofgem has capped the price suppliers can charge households with this type of meter.
  • Price cap – this is a limit set by Ofgem for what energy suppliers can charge typical customers. Currently, this cap is set at £1136 per year for a standard variable tariff dual fuel customer paying by direct debit, although benefits of this price cap will depend on the amount of energy you use, the tariff you’re on and how you pay. The price cap affects pre-payment customers, those on a standard variable tariff and people who receive the Warm Home Discount. But the best way to save money is to shop around.
  • Priority Services Register (PSR) – this is a free service offered by energy companies and networks that provides extra support to vulnerable clients. Vulnerabilities may include age (either advanced age or young children), language barriers and mental or physical illnesses, although there may be other reasons you would want to sign up. The support varies but can include advanced notice in the event of a planned power outage, priority in an emergency (e.g., temporary heaters and/or hot meals delivered), quarterly meter reading services and annual gas safety checks for homeowners.

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Q

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R

  • Renewable Heat Incentive (RHI) – this government scheme promotes households to adopt renewable heating through financial incentives. There are requirements to enrol in the scheme, but if you meet the scheme rules, you can receive payments for the amount of clean, green renewable heat you produce.

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S

  • Smart meter – this new kind of energy meter transmits meter readings to your energy supplier automatically. They are gradually replacing standard energy meters through the UK and should be offered to everyone by 2020. These meters come with IHDs that can help customers better understand their energy use but, even without an IHD, the smart meter will continue to work. More info can be found on our FAQs page.
  • Standard variable tariff – in this type of energy plan, the price per kWh can fluctuate from month to month. It is typically the most expensive plan offered by an energy provider. Oftentimes, when a customer’s fixed rate plan runs out, they are automatically rolled over to a standard variable tariff. There are no exit fees on this plan, so it’s a good idea to look for better deals. Ofgem has capped the price suppliers can charge typical households on this tariff.
  • Standing charge – this charge is what you pay every day to be connected to the gas and/or electricity. There are separate charges for both. On top of this payment, you pay for the energy you use as well. Not all suppliers have standing charges but they may instead charge a higher unit rate. So if you’re away for much of the year or use very little energy, finding a company that has a zero standing charge could be right for you. Comparison sites should help you find that sweet spot.
  • Supplier – this is the company that provides your gas and/or electricity. You may have heard of the ‘Big 6’ but there are now many new smaller companies entering this market. While the supplier is who you pay your bills to, the network operator is responsible for maintaining the power lines and cables to get the energy to your home. You can choose your supplier but cannot choose your network operator. If you don’t know who your supplier is, you can call 0870 608 1524 for gas and 0345 026 2554 (Option 3) for electricity.
  • Switching window – the final 49 calendar days of a fixed-term contract when customers can switch energy suppliers without being charged an exit fee.

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T

  • Tariff – a fancy name for an energy plan or deal.
  • Tariff comparison rate (TCR) – this figure can help a typical energy consumer compare deals offered by suppliers. It’s given as a price per kWh and can be found on many energy bills, although it’s no longer mandated by Ofgem. While the TCR is only a guideline, it can help consumers navigate the often complex energy market.

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U

  • Unit rate – the price consumers pay per unit of energy, measured in kWh.
  • Utility – also known as an energy supplier or energy company. They are in charge of selling customers energy (gas and/or electricity), billing and customer service. If you don’t know who your supplier is, you can use the Meter Point Administration’s online search tool or call 0870 608 1524 for gas and call 0345 026 2554 (Option 3) for electricity.

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V

  • Variable rate – this is a rate, agreed in your energy contract, that is charged for each unit of energy you consume which fluctuates with market rates. Typically, if wholesale energy prices go down, so will the price you pay per kWh of energy consumed. Similarly, if prices go up, your unit rate probably will, too.

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W

  • Warm home discount – this government scheme provides vulnerable customers with a one-off £140 rebate on their energy bill during the winter period. People receiving guaranteed pension credit are part of the scheme’s ‘core group’ and should automatically receive the discount. Customers receiving other benefits or who are struggling financially may be eligible for the discount under the ‘broader group’. The criteria vary between suppliers, so it’s worth checking with them about their eligibility requirements. Ofgem has capped the price suppliers can charge households receiving this discount.
  • Winter fuel payment – this government scheme helps people 65+ in receipt of the State Pension (or other benefit) with their heating bills. Eligible energy customers should receive their payments automatically by the middle of January. The payment could be between £100 and £300.

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X

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Y

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Z

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