Co-op enters energy market, but is it any good?

The Co-operative (Co-op) has entered the energy fray this week but its new gas and electricity deal is anything but a market leader. The typical monthly bill for Co-op Energy dual fuel (where both gas and electricity is supplied), paid by direct debit is £1,023 a year, although prices vary by region.

The current cheapest dual fuel deal for the average household is British Gas's WebSaver 11 which costs £931 a year typically, a difference of almost £100.

However, Co-op says it plans to maintain a consistent price, meaning its rate is not an introductory offer that will jump in a year, unlike many of its competitors.

Of course, all prices on variable deals will rocket if energy prices rise across the market. A Co-op spokesman says: "We won't try to be the cheapest with short-term, unsustainable price promotions. Instead, the aim is to be consistently competitive for the long-term." Co-op Energy got the go-ahead from regulator Ofgem yesterday, following a two-month trial. Its first, and currently only, tariff is the Pioneer deal, which is available to consumers either as a single fuel or as a dual fuel tariff. Customers can also switch away from Co-op Energy at any time without a penalty fee.

MoneySavingExpert.com consumer products analyst Archna Luthra says: "It's tough to break into the energy market but the Co-op isn't making any waves with its new offering. 

"While its simple tariffs are a winner, it's a let down on its mediocre pricing."

Switch now

If you've not switched energy tariff in the past year, it's likely you're paying too much.

According to comparison site Energyhelpline.com the average household on a standard tariff pays roughly £1,150. That household could save over £200 by switching. However, with the big six firms hiking prices by 5.9% last winter, and predictions prices could rise by 15% this summer, now is a good time to consider fixing if price hikes will be unaffordable (see this week's Martin's Money Tips email for details).

But the energy market is complicated so always do a comparison based on your circumstances to find the best deal as prices vary dramatically by region and according to how much you use.

It may be that tariffs which on average are costly, end up being the cheapest for you.