When it comes to your electricity bill, two terms often cause a bit of confusion: unit rates and standing charges. Understanding what each means and how they affect your overall bill can help you make better decisions about your energy deal.
Whether you’re switching tariffs or simply trying to get a handle on your bills, this guide breaks it down for you.
What is a Unit Rate?
The unit rate is the amount you pay for each unit of electricity you use. It’s measured in kilowatt-hours (kWh), and it directly reflects your energy consumption. In simple terms, the more electricity you use, the more you’ll pay in unit charges.
| Example: How Unit Pricing Works? Let’s say your electricity tariff is charged at 30 pence per kilowatt-hour (kWh) – this is your unit rate.If you use 1,000 kWh of electricity over a billing period, your cost for the energy used would be:1,000 kWh × £0.30 = £300. This £300 is the cost of the electricity used – it doesn’t include any standing charges (if applicable), that would be added on top. The unit rate is based on your energy consumption – the more electricity you use, the more you pay. |
Unit rates can vary depending on a few factors:
- Your supplier and tariff – Some suppliers may offer cheaper unit rates as part of a discount term or introductory deal.
- Your payment and billing method – Paying by direct debit or online billing typically gives access to lower unit rates.
- Meter type – Standard 24-hour meters have a single unit rate for all electricity used, while Economy 7 meters apply two different rates – a cheaper rate at night and a higher rate during the day.
When suppliers adjust their prices, it’s usually the unit rate that changes – either increasing or decreasing depending on market conditions. It’s always a good idea to regularly check your tariff and compare it with others on the market to ensure you’re not overpaying.
It’s also important to check the unit rates that will apply once any discount tariff or introductory offer ends. Often, when these deals expire, suppliers automatically move you onto a standard tariff with a higher unit rate. This can lead to a noticeable increase in your bills, even if your usage stays the same. To avoid overpaying, always check what rate you’ll be moved to and consider switching to a better deal when your current offer ends.
What is a Standing Charge?
A standing charge is a fixed daily fee that covers the cost of supplying electricity to your home – regardless of how much or how little you use. It helps pay for maintaining the network, reading meters, and other essential services.
Standing charges are applied on a ‘pence per day’ basis and apply no matter how much (or how little) energy you use.
| Example: How a Standing Charge Works Let’s say your electricity tariff includes a standing charge of 10 pence per day.For an annual bill (365 days) the cost of the standing charge would be: 365 days × £0.10 = £36.50 This £36.50 is added to you bill in addition to the unit rate charge. The Standing Charge is a fixed daily fee (pence per day), so will apply regardless of how much energy you use |
All suppliers need to cover the cost of supplying electricity to your home, but not all of them separate this out as a distinct daily standing charge. Some include these costs within the overall unit rate.
That’s why it’s not enough to compare unit rates alone. It’s important to look at the full cost of a tariff – including whether a separate standing charge applies. At Power to Switch, we make it easy by calculating the total cost of all deals, whether the supplier uses a single unit rate or includes a separate standing charge.
How These Charges Affect You
Understanding the balance between unit rates and standing charges can help you choose a tariff that best suits your household’s needs. The key point is that unit rates are linked to consumption – the more energy (kWh) used in the home the higher the bill. Standing Charges are applied on a ‘pence per day’ basis and therefore is not linked to energy consumption.
- Low energy users (e.g. single-person households, second homes) might benefit from a tariff with a low or no standing charge, even if the unit rate is slightly higher.
- High energy users (e.g. larger families or homes) might prefer lower unit rates, even if that comes with a higher standing charge.
When comparing tariffs, don’t just focus on one part of the bill. A low unit rate might look attractive, but if it comes with a high daily standing charge, you could end up paying more overall – especially if your usage is relatively low.
Final Thoughts
Electricity pricing in Northern Ireland doesn’t have to be confusing. By understanding unit rates and standing charges, you will be better equipped to find a deal that suits your needs.
With prices fluctuating and more households seeking better value, staying informed is key. And if you’re thinking of switching suppliers, comparing both elements of your bill – unit rates and standing charges – will help you make the best choice.
Use our free comparison tool today – and see how much you could save. Our customers save an average of £421 per year when they switch with us
