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What are the benefits of supermarket energy tariffs?

Our expert says...

Thanks for your email about supermarket energy tariffs. I know how confusing the energy market is, and since de-regulation, prices are very difficult to compare – least of all when you’re put on the spot and asked whether you want to switch.

If you haven’t already, then read my quick guide to doorstep selling, it should help answer a few questions about energy suppliers’ code of practice. Below is some more information about supermarket energy tariffs:

Supermarket energy tariffs

Supermarkets offering energy tariffs work in partnership with existing energy suppliers to offer a gas and electricity service to their customers with loyalty rewards. There are currently two supermarkets offering energy tariffs in the UK:

• Sainsbury’s Energy
• M&S Energy

Sainsbury’s energy tariff was first launched back in 2001. Originally Scottish Power (www.scottishpower.co.uk) provided the gas and electricity for the service, but from September 2006, EDF (www.edfenergy.com) took over as energy supplier, and now all Sainsbury’s Energy customers receive their energy from EDF.

The energy deal from Sainsbury’s is an online tariff, with paperless billing, and can only be paid for by monthly direct debit.

High street retailer Marks and Spencer joined forces with Scottish & Southern Energy (www.scottishandsouthern.co.uk) last year to offer customers both dual fuel and single fuel tariffs with M&S Energy. This tariff can be online or as a standard tariff, and you can pay by monthly or quarterly direct debit, by credit card/debit card or cheque.

All the electricity going to M&S Energy customers comes from Scottish hydro-generating plants – making it a “green” energy option for those who would rather use renewable sources.

Advantages of supermarket energy tariffs

The main advantages of supermarket energy tariffs are the reward schemes. Below are details of both Sainsbury’s Energy and M&S Energy’s current incentives:

Sainsbury’s Energy - Customers signing up to the Sainsbury’s Energy Read. Reduce. Reward Scheme will be given Nectar points, to spend both online and in store. Points can be earned through quarterly meter readings.

By submitting your meter reading online within seven days of receiving your e-bill, you will receive 250 Nectar points, and if you submit a meter reading by phone you will receive 200 Nectar points. If you have reduced your annual energy consumption, you will be rewarded with 1,000 Nectar points per fuel.

As a guide, 500 Nectar points will earn you £2.50 off your shopping at Sainsbury’s or Argos.

M&S Energy - M&S rewards customers with a £15 voucher if they reduce their annual energy usage by 10%, and customers opting for paperless billing will get another £10 voucher. Dual-fuel customers switching to M&S Energy will also receive a £20 M&S voucher when registering, and a further £10 loyalty voucher for each year they remain with M&S Energy.

In addition, if customers pay by monthly direct debit they’ll also receive a discount of 5% on their energy bill.

Switching energy suppliers

While the rewards offered by supermarket energy tariffs are tempting, switching to one may not be the best option for you financially, as you may not be making any savings.

Before you decide to switch energy supplier you should compare energy prices to find out which supplier can offer you the cheapest prices for your gas and electricity, factor-in how “green” you want your energy to be, and then weigh up the savings you’ll make with the new supplier against the rewards on offer from the supermarket supplier.

Hope this helps Janice, and remember, if you do decide to switch, you stand to make the most savings by signing up to an online tariff, registering for paperless billing, and paying your bills by monthly direct debit.

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If you have an energy query please email ourexpert@energychoices.co.uk

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