Is electricity cheaper than gas? How to save money on energy bills | Personal Finance | Finance

The energy bill price cap was raised by a staggering 54 percent in April due to increasing wholesale gas prices, leaving families across Britain forking out £700 more on energy costs. Now, with another price cap rise looking even more likely in October, many are searching for alternative sources of power to cut costs.

The price cap in October is expected to increase by a further 24 percent, adding an additional £400 to Briton’s already rocketing bills.

Amongst soaring fuel prices, inflation rates, and tax increases, many are feeling the financial pinch and it comes as no surprise that households are looking for ways to reduce living costs.

Naturally, one of the more popular searches is how to reduce electricity bills, including what other ways there are to heat the home.

You can heat the home from two different fuels, gas or electric. But which of the two is cheaper to run?

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Is gas or electricity cheaper?

Determining which fuel is cheaper can be tricky and depends on several factors; what type of gas, how large your house is, and so on.

But if you’re looking at the average cost of each fuel per kilowatt hour (kWh), gas comes out on top.

According to British Gas, the electricity unit rate currently sits at 28.34p per kWh plus a standing charge of 45.34p per day, while the gas unit rate is 7.37p per kWh with a standing charge of 27.22p per day.

However, this doesn’t guarantee you’ll be making a saving by switching to gas, as overall running, maintenance, and installation costs would likely exceed what it could cost to power the home on electricity.

Comparison site lookaftermybills.com said: “Gas energy is much cheaper to run than electricity on a regular basis, but the overall costs of installation, maintenance and running expenses tend to favour electricity, with the average lifetime of products also outlasting that of gas.”

The typical cost to install a gas-fired central heating system, including boilers, radiators, controls and pipes, can be anything from £3,000 to over £4,500, according to EDF Energy.

Whereas low-cost, electric heating comes in much cheaper, with installation rates starting as low as £20.

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This isn’t the case for gas or an oil-fired central heating system as according to EDF, even an A-rated boiler wastes around 10 percent of the energy in its fuel.

All the while only a small amount of electricity is needed to run a boiler.

Therefore, electricity appears to have much more value for money than a gas-fired system.