British Gas announced this week that they will raise their electricity prices by 12.5% from 15th September. Although gas prices will remain unchanged, those on dual-fuel tariffs will see an average increase of £76 on their annual bills, a rise of 7.3%.
Iain Conn, the chief executive of Centrica, the parent company of British Gas, stated, ‘It is transmission and distribution of electricity to the home and government policy costs that are driving our price increase.’
Whatever the reasons behind it, the price increase of British Gas tariffs will come as unwelcome news for customers. It may, however, provide an extra incentive to save energy around the home.
How much could you save with LED light bulbs?
One of the easiest ways to save energy is by switching to LED light bulbs. While their upfront cost is greater than most traditional light bulbs, their energy-saving qualities mean that some households could cover the cost of increased energy bills completely, just by switching to LED light bulbs.
To find out how much the average household could save on its utility bills, we compared the cost of switching to LED light bulbs against sticking with incandescent light bulbs. Our example is based on a standard British Gas tariff for a two-bedroom home in central London with 8 main light fixtures to replace.
In our example, you could save around £60 over the first year of switching to LED light bulbs, after factoring in energy prices and the purchase price of the light bulbs. For every year after that, you would save nearly £90 on your energy costs, easily covering the average annual increase of £76 that many homes will see after British Gas increases its prices.
This is just one example and isn’t reflective of every household, but it demonstrates the significant cost-saving potential of LED light bulbs. This example also doesn’t factor in secondary lighting sources like desk lamps or outdoor lighting, so the savings could be even greater.
The final stage of the EU ban on ‘high-energy’ light bulbs takes effect in September 2018, after which the only choices when buying light bulbs for general use will be energy-saving options like LED and CFL. The decision by British Gas to raise electricity prices means that it makes sense for a lot of homes to switch to LED sooner rather than later.
How We Compared Prices
We compared a 5.5-watt LED GLS light bulb with a 40-watt incandescent GLS.
The cost of one LED light bulb is £2.42. If an average two-bedroom house has 8 main light fixtures, the upfront cost of replacing all 8 light bulbs would be £19.36.
The price of electricity on a standard British Gas tariff, based on a property in central London, is currently around 15.5 pence per kWh. Add 12.5% to this to account for the British Gas price rise and it comes in at around 17.4 pence per kWh.
Based on using just one LED light bulb for an average of 4 hours per day would cost 11.9p a month. The cost of the 40W incandescent for the same period is 86.3p per month.
A year’s use of the LED light bulb comes to £1.39; for the incandescent it is £10.16.
Multiply this by the 8 light bulbs around the home and total energy costs for the LED lights are £11.12. For the incandescent light bulbs it is a massive £81.28.
Factor in the upfront purchase price of the light bulbs and the total cost of the LED light bulbs comes to £30.48
Therefore, the total saving for switching to LED light bulbs comes to £50.80 for the first year. For every year after that, you would save nearly £70, as you no longer need to cover the upfront cost of the LED light bulbs.
Read more about the money-saving potential of LED light bulbs.