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How much does a unit of energy cost?

Posted on 22 December 2015

Just like with any other service, when it comes to paying your energy bill, it’s important to know exactly what you’re getting for your money. Despite paying for your energy on a regular basis, do you really know what you’re being charged for? Understanding your energy bill is vital as you’ll immediately be able to spot whether there are any errors or if you’re being overcharged. So, to get you up to speed, here’s a breakdown of the cost of energy.

How much does a unit of energy cost?

Your energy, including both gas and electricity, is actually broken down into two separate charges.

Standing charge – this is a fixed rate amount that is charged to you daily in order to cover the costs of providing your property with electricity or gas, maintaining the energy networks and the cost of maintaining your meter.

Unit rate – this charge is for the amount of gas or electricity you actually use, usually expressed as pence per kWh. If you’ve got an Economy 7 tariff, you’ll see two different unit rates for electricity on your energy bill, one for day and one for night. The night unit rate is less than the day unit rate, so for seven hours overnight you’ll be receiving cheaper energy.  

Kilowatt hours (kWh) – A kilowatt hour is the unit in which energy is measured. Both gas and electricity will be charged to you in this measurement unit.

How much does a unit of electricity cost?

When calculating the cost of electricity in your energy bill, your energy provider will record how many kWh of electricity you have used over a certain length of time and then multiply this by the price per unit set in your tariff.

The tariff’s daily standing charge is then multiplied by the number of days in the billing period and subsequently this value is added to the unit rate to calculate your total electricity bill.

The unit price stated in your tariff will vary depending on your supplier, as well as on your location across the country. To give you an indication as to how far one kWh of electricity will actually go, it’s roughly equivalent to running a washing machine for an hour.

How much does a unit of gas cost?

Gas is calculated in exactly the same way as electricity in your energy bill. The unit rate is calculated by the amount of gas used multiplied by the price and the tariff’s standing charge is multiplied by the number of days in the billing period. Once again, these values are added together to provide your total gas bill. If you use both gas and electricity, the total values will be added together to make up your final energy bill.

Again, the unit prices of gas will vary depending on your supplier and location. However, you can gauge one kWh of gas as approximately equal to leaving a small gas hob ring on for one hour.

To find out exactly what tariff charges Co-operative Energy can offer you, compare our prices to see how much you could save on your energy.

For our current tariff contracts, check out our range of domestic gas and electric products to find an offer that suits you. If you want to take a closer look at your energy bill, as an existing customer you can read our handy guide on better understanding your bill and annual statement.

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