Factors That Drive Electricity Price
There’re many different factors that shape and alter your overall electricity price. Of course, most people want a cheap and easy deal but today these can be harder and harder to come by. Whether it’s economic shifts, worldwide events or just seasonal, electricity prices constantly fluctuate.
Here are some of the factors that drive electricity prices.
Seasonal Weather Conditions
Different weather ushers in different demands for electricity. Brighter, longer summer days give less cause for our lights to be switched on and fewer kettles are boiled. Obviously, come winter, darker nights mean we switch on our lights earlier and use electrical items like electric heaters and blankets to keep us and our families warm.
It’s when electricity is rarely used that the prices inflate to match the waning interest. When there’s high demand, it’s cheaper, so that everyone can more ably afford their electricity needs. Seasonal weather conditions is the most common factor that drives electricity prices nationwide.
Politics affects the economy, and the economy affects energy prices. Global events can have a big impact on how much people pay for their electricity. Whether you’re for or against Brexit, it has changed electricity prices and will continue to do so once a deal has been reached. Reportedly, households paid an extra £75 in their energy bills as a direct consequence of the Brexit vote. Political affiliations aren’t the cause of the increase, it’s the market fluctuations caused by the uncertainty around Britain leaving the EU and other global factors at play. Business electricity prices are one of the places where the impact can be felt most deeply.
Matching Price Rises
In a competitive market, when one supplier increases their prices, others often follow suit. And the electricity market is no different. For example, when British Gas raised their prices last year, electricity price increases were seen across the board. Most suppliers, however, will aim to offer a fair deal to their customers. Market trends are another significant cause of electricity price rising.