What makes up your energy bill?

We’d like to shed some light on energy prices. A recent npower survey showed that customers think suppliers’ profits could be as much as 40%, and that their bills are rising due to our increasing costs.

The cost of energy involves much more than just the price we pay for getting gas and electricity to your home. We believe you’d like us to be upfront about what really makes up the cost of energy, and to present the facts in a clear, transparent way. So it may surprise you to hear that our profits are only about 5% – that’s about the same as most supermarkets and far lower than many companies of our size.

We’ve invested more than £5bn in the UK over the past six years, creating jobs, and investing in wind technologies and new power stations. We’re also delivering government energy efficiency programmes that can help reduce the amount you spend on gas and electricity. These investments should help bring down the cost of energy in the long run.

Here’s how a typical bill is made up:

Electricity bill costs

  •  22%
    Cost of Government Schemes
  •  18%
    Our operating costs
  •  23%
    Cost of getting power to your home
  •  29%
    Cost of buying energy
  •  5%
    VAT
  •  3%
    Profit

Gas bill costs

  •  6%
    Cost of Government Schemes
  •  19%
    Our operating costs
  •  25%
    Cost of getting power to your home
  •  40%
    Cost of buying energy
  •  5%
    VAT
  •  5%
    Profit

These breakdowns are based on an estimate of costs at Ofgem’s annual average consumption (3,100 kWh for standard rate electricity and 12,500 kWh for mains gas).