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Giving it away: Is the British Gas free energy deal a sign of things to come?

By Energy Company Numbers on February 1, 2017 in British Gas, Help and advice
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Major UK energy supplier, British Gas, have recently unveiled a ground-breaking new tariff, designed to cut energy bills and help their customers save. In an industry first, they are actually offering to give energy away for free for one day a week, to anyone taking up their newly designed FreeTime offer.

As customers scramble to sign up for this unusual offer, we ask, is it the first of many? Will we see more deals for free or very cheap energy coming out from the rest of the ever competitive Big Six, and is the British Gas deal actually any good?

How will the deal work?

The British Gas deal will involve FreeTime customers getting free gas and electricity on one weekend day, either Saturday or Sunday, for the lifetime of the contract. Energy would be free from 9am until 5pm and fixed until March 2018, and the consumer gets to choose which day they have free.

Initial trials of the scheme showed that around 86 per cent of households tended to move their lifestyle around to make the most of the free energy hours.  They would save doing energy intensive tasks such as washing and drying on their free energy days, increasing the potential savings available from FreeTime.

Related: What is British Gas Boiler IQ?

For British Gas, this type of scheme could help them manage and balance their energy supply better, by encouraging more domestic energy use to be saved until the weekend when many high energy consumers, such as businesses, are offline. For consumers, this could end up saving them money on their bill, with initial trials suggesting savings of around £60 a year.

Who can use the deal?

FreeTime is available to any duel fuel customers of British Gas who have already had their smart meter installed, and is fixed until March 2018. Unfortunately, of the 11 million customers who are currently with British Gas, only around 2.4 million have so far had their smart meters installed. However, the rollout continues, and all households will have had their meter by 2020, so if the scheme is a success, it is expected it will continue to be offered.

Could this work for other suppliers?

As more homes come online with their smart meters, it is likely more innovative tariffs will be offered by other suppliers across the UK. Because smart meters allow for real time control, monitoring, billing and tariff changes, suppliers now have an open door for making incredible offers to their customers which really suit their needs and lifestyles.

Related: British Gas Hive Active Heating thermostat guide

In Wadebridge, Cornwall, residents are trialling an energy scheme that links in with solar power installations in the area. Working with Tempus Energy, the Wadebridge Renewable Energy Network (WREN) has developed the ‘Sunshine Tariff’ initiative to give residents cheaper energy on sunny days, when the local solar panels will be working most effectively. The scheme offers rates as low as 5p per unit on sunny days from April to September, giving residents a chance to benefit directly from the energy produced by solar farms in the area.

Innovative ‘smart thermostat’ manufacturer Nest have also come up with a way to help their customers cut energy consumption, although this time it’s at the consumer end. By tracking the price of energy, Nest is able to reduce the amount of energy use in the home to avoid too much consumption at the most expensive times. Working in conjunction with energy supply partners, Nest hopes to save customers money through this Time of Savings Plan.

It’s clear that there is an opportunity to maximise the times when energy is cheapest, and that these types of schemes will not only help us save money but will help suppliers balance energy production too. Without a doubt, as we move towards a 100 per cent smart meter based energy system, we’ll see many more innovative tariffs introduced, not just by the Big Six, but also by some of the smaller energy suppliers.

Is the deal worth it?

The FreeTime deal requires customers to be on a British Gas tariff, so it’s important to consider how much this will cost overall when deciding if this is a good deal for you or not. When consumer watchdog Which? checked the British Gas tariff rates, the cheapest duel fuel tariff they were offered would cost on average just over £1,000 a year.

Right now, deals from other suppliers could cost as little as £770 a year. This means that, even with the projected £60 a year saving through FreeTime, customers could still be overpaying by around £170 compared to the current, cheapest fixed rate deal. While FreeTime certainly sounds appealing, it’s worth thinking about your lifestyle and how much benefit you would get from this offer before jumping in to a long contract such as this.

FreeTime is an industry first, and is certainly a sign of things to come. These are exciting times for gas and electricity in the UK, and we’re looking forward to seeing what the other suppliers are going to offer to compete with this innovation from British Gas.

About the Author

Energy Company NumbersView all posts by Energy Company Numbers
Energy Company Numbers is a telephone number directory service dedicated to helping UK consumers keep in touch with their energy suppliers.

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