5 Things electricity companies don't want you to know

If you take a look at the 30 odd electricity suppliers in the United Kingdom, you’ll notice their value propositions are very much the same. They promise “cheap” electricity deals that are “easy” for the consumer.

 

     
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Electricity Company CEOs are Milking You as You Spend 90% More on Old Type Light Bulbs

According to UK Power the average electricity bill costs between £432 and £456 annually, calculated on 3200 kWh of electricity per year, across most providers, so there’s not much variance between them and that’s despite the market being so competitive. And, what’s more, according to an assessment of global electricity costs, the price of keeping our homes warm and illuminated last year (2014) was the third highest out of a total of 18 other countries, at 15 US cents per kWh. In relative terms, the cost of staying warm and powering our modern appliances certainly doesn’t come cheap.

 

Electricity Is Essential. What Can We Do About It? Electricity Prices by Country

Sure, electricity can be “easy”—that is if you continue to use previous generation light bulbs and pay the £32-£36 utilities bill you receive every month without question. These are the bulbs patented by Thomas Edison 130 years ago, and in the context of our rapidly evolving technological advances, are incredibly antiquated and wasteful.

The thing is, when incandescent bulbs light up, you are not getting your full value for money because you’re losing about 90% to 95% of that power to the heat they generate. Yes, you read that right. You’re paying 100% of your bill and receiving 5% to 10% of the product in its usable form. Would you continue to do this with any other product or service?

Probably not, especially if you knew there were more cost-effective and sustainable options out there. And, believe it or not, there are. You just haven’t heard much about them because the economics are working out really well for power companies. The world might have gone moggy with green washing and promoting eco-friendly existences in the last two decades but we have continued to use inefficient lighting sources, and sadly at the behest of profits.

In fairness, the European Union did enforce a ban on incandescent bulbs beginning in 2009, but the alternative that got all the limelight was the CFL. CFLs might be more energy efficient than incandescent bulbs, but because of their mercury content they are potentially hazardous if they break and logistically are very difficult to dispose of. In other words: NOT SUSTAINABLE which many consumers saw straight through this.

In global terms, the EU’s ban was quite slow on the uptake, with Venezuela and Brazil initiating bans as early as 2005. Not only that, the EU implemented a “gradual phasing out” of previous generation light bulbs over a two year period and a lot of light bulb suppliers adopted the “Stock up on these before you can’t get them any more” marketing message. Plenty of homes began to stock pile them, so that two year window got a whole lot bigger. And if you want to believe the conspiracy theorists, there is plenty of evidence indicating that the move was stalled to protect the interests of the electricity companies.

Speaking of marketing, the public relations angle England adopted to motivate the change was related to greenhouse gas emissions so government could protect business. And the perception of consumers was that governments chose to support energy efficient bulbs through legislation because consumers were not buying them of their own accord. Again, in the interests of protecting business.

 

     
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What Can You Do to Cut Back on Electricity Consumption?


Bulb Investment

Individuals also have a role to play in ensuring that we don’t waste electricity and sure, many of us have really bad habits when it comes to our energy consumption. The Telegraph ran an article in June 2014, detailing all the appliances and devices that consume power even when they are on standby. Also, our modern creature comforts certainly consume the most with wireless routers, laser printers, satellites, amplifiers, hi-fis and iPhone chargers consuming the most power when not in use. The list carries 26 products that you could switch off to save on your utilities. But, even if you have all 26 of them in your home (and most of us won’t), at best you’ll only be saving a maximum of £80 per year, or £800 over a 10-year period (remember this because we’ll come back to it later).

By far, the most energy efficient change any household can make, is the LED light bulb. But the biggest argument against LEDs is the initial cost output per bulb. In simple terms: LEDs are more expensive than incandescent bulbs, but it is one of those concepts where you pay a little more now to save in the long run. Also, for consumers who aren’t aware of all the advantages of LEDs, it does give incandescent bulbs the price advantage. It makes it difficult for economically disadvantaged communities to make the change. And, yes, electricity CEOs are laughing all the way to the bank.

Back to the marketing angle: it’s arguable that LEDs could have been branded with more accuracy. They aren’t fast moving consumer goods; they are investments that last 30 years. In the investment world, 30 years is “long term”. Like any investment, LEDs generate a return. In the context of other investments, it is a very lucrative return. But it’s likely you don’t know that because that’s not how they’ve been marketed to you.

 

     
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If you want to calculate your ROI over a three year period, you can use our LED lighting energy saving calculator, but if you’d like to calculate your investment over 10 years, you’re looking at a saving of £7,684. That makes that £800 saving from switching off your gadgets pretty meagre, doesn’t it?

10y_Graph

Onto the bigger picture stuff, and possibly, into the next 30 years: the slow uptake of LEDs into the local market has had other repercussions. Of note is the deal that the Department of Energy and Climate Change has struck with Chinese companies, which effectively allows them to invest in local nuclear power plant projects. Ok, you might say, foreign investment does have its perks, but you might also want to know that the deals also allow Chinese companies to build their own nuclear reactors in the UK, affecting local content and local job creation. Let’s concede again and say that nuclear power might be a necessary evil, to keep up with demand of course. But then again, if it is possible to reduce the demand from light bulbs by 90%, all this isn’t really necessary is it?

It is if we don’t want to address the real issue of consumption and the reality is that the lifespan of an LED is an unsurpassed 50,000 hours, compared to only 2,000 from an incandescent bulb. If we take another look at the savings calculator, it is true that an investment in an LED bulb is going to cost you around £50 more than the incandescent equivalent, but when you take your monthly savings and the extended lifespan into account, you’re looking at an approximate saving of £553 per bulb and, to take you back to the second paragraph, that’s more than what you are paying for electricity for an entire year.

If you don’t want to continue lining the pockets of big corporates and would like to take a more proactive approach to your own budget, make the switch to LED bulbs.

Better yet, make sure they are local LEDs that are backed by a 5-year guarantee, are sustainable, safe to dispose of, and high quality.

 

Quit wasting your hard-earned money and shop for LED replacement bulbs.

 

     
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