British Gas offer: Is free energy the future?

The rising cost of energy is a concern for many households. The average annual electricity bill has risen by 48 per cent over the past ten years, according to government statistics. So, the news that British Gas is going to start offering customers free electricity at weekends sounds great.

But, is it really a good deal, and could we all soon be enjoying free energy at the weekend?

What is British Gas offering?

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British Gas has announced that it will be offering free daytime electricity to customers for one day each weekend. Customers will pay nothing for electricity between 9am and 5pm on either Saturday or Sunday, and British Gas’s standard rate at other times.

The deal could save customers an average of £60 a year, according to the company.

“FreeTime is an industry first and will give our customers greater control of their energy use,” says Sarwjit Sambhi, managing director of UK home at British Gas. “This will be the first of many smart-meter innovations from British Gas which will also contribute to managing the country’s demand for power from the national grid.”

Sounds great. Is it?

Firstly, to take advantage of this deal you have to have a smart meter installed in your house. “So, less than a fifth of British Gas’s 11 million customers will actually qualify,” says Olivia Rudgard in The Telegraph.

The second problem is that FreeTime is only offered with British Gas’s standard tariffs, which are by no means the cheapest deals.

“British Gas’s HomeEnergy FreeTime deal is, on average, £250 a year more expensive than the cheapest deal on the market, so customers should always shop around,” says Tom Lyon, energy specialist at uSwich.com.

The free electricity will save the average customer £60 a year, according to British Gas, so you’ll save a lot more by switching to a cheaper supplier and paying seven days a week.

“Our independent analysis shows that by using this plan most British Gas customers will get £25-£50 at best off their yearly bill. They can get over £300 a year off by switching,” says Mark Todd, from energyhelpline.com. “Don’t be fooled into thinking you are getting a bargain with this deal. You’ll get free electricity for eight hours but then pay high rates the rest of the week."

British Gas has said they hope customers would change their habits in order to use more electricity on the free day and increase the saving. But, you would really have to ramp up your electricity use to manage it.

Running a washing machine costs around 23p a cycle. “To get the same £300 benefit as you would from switching to the cheapest deal, a household on the ‘free weekend’ tariff would have to do around 1,300 washes on their free day. That’s about 25 washes per Saturday (or Sunday),” says Rudgard.

Could other providers follow suit?

“The industry remains under intense pressure on the issue of price following widespread outrage over bills since the collapse in wholesale costs linked to the plunge in oil prices,” says Sky News.

Which? has called for regulators to crack down on the Big Six who are still offering tariffs that are on average £300 more expensive a year than the cheapest offers. The consumer group wants to see more done to encourage customers to switch.

It will be interesting to see if other providers copy British Gas and take advantage of the technological advances of smart meters to offer free energy deals. But, these gimmicks don’t really help the consumers. They just muddy the waters making it harder to compare like with like.