Energy glossary

Baffled by your energy bill? With plenty of tricky terms to understand, we’ve put together this jargon-busting energy glossary, to help you make sense of everything from kWh to Economy 10.

Baffled by your energy bill? With plenty of tricky terms to understand, we’ve put together this jargon-busting energy glossary, to help you make sense of everything from kWh to Economy 10.

Sofia Hutson
From the Energy team
9
minute read
Do you know someone who could benefit from this article?
Posted 18 MAY 2021

Actual bill vs estimated bill

An actual bill comes from an actual meter reading, whether that’s a smart meter, an engineer visiting your home or a reading you’ve submitted yourself. An estimated bill is when your provider doesn't have a meter reading so it predicts your energy use from previous bills based on your tariff.

Big six

The Big Six is a collective name for the UK’s largest energy suppliers. Takeovers and greater competition in the energy market have made the term ‘Big Six’ less applicable these days. Now they are often simply referred to as the big-name suppliers. These big-name suppliers include:

  • British Gas
  • EDF
  • E.ON/Npower
  • Scottish Power
  • Ovo/SSE

While there is no longer a ‘Big Six’ as such, between them, the large legacy suppliers still hold a 70% share of the UK energy market, according to Ofgem.

Billing period

This is the amount of time your energy bill covers – usually three months. You’ll be paying for the energy you used during this time.

When comparing deals, looking at the overall annual cost can be more helpful in giving you the bigger picture of total costs.

Collective

When related to energy, a collective is a tariff from a supplier that’s available exclusively to a specific group of customers. This doesn’t mean an informal group, like friends or neighbours – it’s more organised than that. In the past, collectives have been arranged by councils, national newspapers and, of course, comparison sites, for their customers. It's often referred to as collective energy switching.

Credit meter

A credit meter is the standard meter used in most households. It allows you to use energy before you’ve paid for it, unlike with a prepayment meter. You can either pay by monthly direct debit or when you receive your quarterly bill.

Debit/credit

This isn’t about paying by debit or credit card. Every year your energy supplier will review how much gas and electricity you use and adjust your payments. If you’re in credit, it means you’ve overpaid and are due some money back, potentially in the form of lower future payments. If you’re in debit, it means you’ve underpaid and will need to pay a bit more.

Dual fuel

This is when one energy company supplies you with both electricity and gas. You might be able to get a discount for  choosing dual fuel and it makes it easier for managing payments. But it’s not necessarily the cheapest option, so it’s always worth comparing fuels separately.

Economy 7 and 10

Economy 7 is a type of energy tariff that aims to help you save money by running a different electricity rate for seven hours overnight. Economy 10 allows customers to have 10 hours of the cheaper rate. But Economy 10 has a set of ‘off-peak’ times decided by the individual energy supplier, which could be split across parts of day and night.

Both tariffs use a different type of meter that incorporates the two different energy rates. This can sometimes make it more expensive to switch, although you might save money on electricity in the long run. Find out more about Economy 7 and 10.

Energy price cap

The energy price cap is a limit on how much providers can charge per unit of gas and electricity each year, as set by energy regulator Ofgem. It only applies to customers who are on a prepayment meter or standard variable tariff, which is usually a supplier’s most expensive tariff.

Estimated annual projection

Your estimated annual projection is an energy company's best  calculation of how much energy you’ll use in the coming year and what that will cost.

Exclusive tariffs

An exclusive tariff is a special tariff that’s available only to a select group, or from an energy provider's particular partner – like Compare the Market – and is not available elsewhere. It can have particular benefits and conditions. Compare the Market is often able to offer its customers exclusive deals. See what is currently available.

Exit fee  

If you’re on a fixed energy tariff and want to leave before the contract ends, you might be charged an exit fee. But you shouldn’t have to pay an exit fee if you switch within 49 days before the end of the contract term.

Make sure you know how long you’re tied into a fixed tariff before signing the contract, and check how much any exit fees might be, as this could ultimately cost more than being on a variable tariff.

It’s worth noting that if you do decide to switch suppliers, you have a cooling-off period of 14 days to change your mind, without having to pay any exit fees.

Fixed tariff

A fixed price plan is where the amount you pay for each unit of energy and the daily standing charges are fixed until a set date in the future. But the size of your bill will depend on how much energy you use. Fixed rate tariffs help to protect you from energy price rises, but if energy prices fall, you won’t benefit.

Green energy 

This is power that’s generated in a way that could be considered more environmentally friendly, from natural sources including wind, sunlight and tides. Renewable sources of energy like wind turbines, solar energy, biofuels and water turbines are all considered green energy.

kWh – kilowatt hour

This is how the energy you use is measured. Just like miles per hour in a car, kilowatt hours gauge how much energy you’ve used over your billing period. This is multiplied by your unit rate to generate your energy bill.

MPRN and MPAN

These are reference numbers for your gas and electricity providers.

MPRN stands for Meter Point Reference Number. It’s also known as an ‘M number’ and identifies your gas supply point.

MPAN stands for Meter Point Administration Number. Also known as an ‘S number’, it relates to your electricity supply point.

You don’t need to worry about these too much, but you may need to reference them when switching suppliers.

Network costs

The network cost is how much it costs for your provider to supply your home with energy.

Ofgem

Ofgem is the Office of Gas and Electricity Markets. It regulates the energy market in the UK to protect consumers' interests.

Personal projection

All energy suppliers are required by Ofgem to make the information on their bills as clear as possible. A personal projection is an estimate of how much energy you’re likely to use and have to pay for over the next 12 months, based on what you’ve previously used.

Prepayment meter

With a prepayment meter you pay as you go for your energy by putting credit on your account before you use it, rather than receiving bills after power has been used. Typically, money is added on to a key or smart card, which is then inserted into the meter. They can be topped up at a local Post Office, PayPoint or corner shop that has the technology. Some can be topped up by mobile phone. Four million UK households use them to help manage their energy use and to budget, but tariffs can be higher than standard meters.

QR Code

A QR code is a type of barcode for smartphones that looks like a square, black and white grid on your energy bill. They were introduced by the Government in 2014 to make it easier for people to access their bill information via their smartphone. You can also use it as a quick way to upload and compare your energy costs.

Renewable energy

Renewable energy comes from a source that’s naturally replenished, for example solar, wind, tidal or wave power. It would exclude non-renewables like coal, oil or natural gas, of which there is a limited supply.

Single fuel

Single fuel is where you get your gas and electricity from different suppliers, or you only use one type of fuel in your home. Separate single fuel energy plans can sometimes work out cheaper than dual fuel deals, but you might receive a discount if you get your gas and electricity from the same supplier, so it’s always worth comparing your options.

Smart meter

Smart meter are slowly replacing traditional energy meters. They work by automatically sending meter readings to your energy supplier, with a display screen in your home telling you how much energy you’re using and how much it’s costing in real time.

If you don’t already have one, you can ask your energy supplier to upgrade your existing meter to a smart meter for free. While it’s not compulsory to have a smart meter fitted, you might miss out on some of the cheapest tariffs on the market if you don’t opt for one.

Standard variable tariff

This is an energy supplier’s default tariff, and usually the most expensive plan to be on, where the amount you pay can go up or down. If you had a fixed rate contract with your supplier that came to an end, you’ll probably have been automatically rolled onto a standard variable tariff.

Standing charge/No standing charge (NSC)

A standing charge is a fee that your energy provider charges for supplying energy to your home. Both electricity and gas have their own standing charge, even if you have a dual fuel account.

In 2016, Ofgem changed the rules so that energy suppliers don’t have to have a standing charge – although most still do.

If your tariff doesn’t have a standing charge, you’ll see ‘no standing charge’ (NSC) on your bill. But this might mean you’re paying a higher unit rate for your energy.

Tariff

An energy tariff is the type of contract you have with your energy supplier. Each supplier has its own range of tariffs, including fixed, standard and green (eco), which detail how much you’re paying per kWh. Find out more about energy tariffs.

Tariff name

Energy suppliers offer a variety of tariffs and name them differently to distinguish the different prices and conditions for each. It’s important to know the name of your particular tariff so you know if it’s a one-year fix, two-year fix or standard plan for example, and when you might need to renew or switch again.

Units

This is how your energy is measured before being converted into kilowatt hours (kWh).

Unit rate

Your unit rate is how much you pay for each unit of energy. It’s calculated in pence per kilowatt hour (p/kWh), with the unit rate multiplied by the number of kilowatt hours you’ve used, to calculate your energy costs.

VAT

As with any goods and services, Value-added Tax (VAT) applies to your energy. The Government has currently fixed VAT on domestic gas and electricity at 5%, which applies to all energy suppliers in the UK.

economy 7 White meter

White meters are the Scottish version of Economy 7 in England. They have different prices for energy at different times of the day and night – known as peak and off-peak times.

You’ll have two meters with two readings showing your normal and off-peak energy use. This means your bill will also show two different rates, which are added together for your total bill cost.

Each energy provider has different costs and rules around peak/off-peak timings, so be sure to compare before making a decision.

Wholesale costs

The wholesale cost is how much your supplier pays for the electricity and gas that they then supply to you. If wholesale costs rise, your bills are likely to go up too, unless you’re on a fixed plan.

Winter Fuel Payment

This is an annual, one-off payment that can help you pay for heating during the winter. You can usually get a Winter Fuel Payment of between £100 and £300 if you were born on or before 5 October 1954.

Compare energy suppliers

Compare energy suppliers in minutes and you could start saving.

Get a quote
Compare energy suppliers in minutes and you could start saving Get a quote