Unit price and standing charge

Unit price and standing charge

What is a unit price?

A unit price is a price for using 1 kilowatt of electricity for 1 hour and is set by your energy company as part of the tariff.

If the unit price is 40p, then it would cost 40p for one hour of usage of a 1kW appliance, 80p for one hour of usage of a 2kW appliance and £1.20 for one hour of usage of a 3kW appliance.

For example, a washing machine typically uses between half a kilowatt per hour (0.5kW/hr) and one and a half kilowatts per hour (1.5kW/hr), so we will average that out and assume it uses 1 kilowatt per hour (1kW/hr). This means that if your unit price is 40p and you use the average washing for 1 hour, the cost of that would be 40p.

A tumble dryer typically uses around 3kW per hour, which makes it around three times more expensive to run than the washing machine. If the unit price is 40p and you use the average tumble dryer for 1 hour, the cost of that would be £1.20.

What is a standing charge?

A standing charge is a fixed daily amount you have to pay for energy, no matter how much you use. It even applies to properties that are empty for part of the year, such as a holiday home. It is added to most gas and electricity bills or is taken off the credit balance of prepayment meters each day. The standing charge covers the cost to your supplier of actually delivering energy to your property.