Have you just signed a new energy contract? If so, the next step will probably be to pay an advance towards your future consumption, in other words an instalment. But what exactly is an instalment and why is it obligatory? How is it calculated? Is it too high? The Energyprice.be team will answer all your questions. Follow the guide!
What is an instalment bill?
When you set up a contract with a new energy supplier, they will send you regular instalment bills. These instalments are provisions for your annual energy consumption. In other words, you pay in advance an estimate of what you are going to consume during the year.
In Belgium, there is no other way to bill your energy consumption. However, it’s no bad thing as the instalment system has several advantages:
It means you don’t have to read your meter every month to find out how much energy you have consumed for each billing period;
It smooths your expenditure, which means you pay the same amount every month rather than a larger amount in winter compared to the summer months;
At the same time, it makes your total budget easier to manage.
How frequently are you billed?
Your supplier usually bills these instalments on a monthly basis (but it’s possible to choose bi-monthly or quarterly billing). It would be rather unfortunate if you had to pay for your entire annual gas or electricity consumption in one go! Please note, however, that if you prefer this option, some suppliers do offer it. They frequently offer reductions as well if you choose this option. It’s up to you to decide whether you can afford such an expense.
How much will you have to pay?
In addition, the amount to be paid for each instalment is always fixed, so your supplier will claim this amount from you for each billing period. They generally prefer payment by direct debit, although many suppliers allow you to make a single payment, but you will then have costs on top.
The instalment amount may be adjusted when you receive the annual breakdown for your energy consumption. At that point, if the total amount you have paid in instalments turns out to be higher than your actual consumption, your supplier will refund you the difference. They will also be able to adjust your provisions for the following year based on the new data. Conversely, if your total consumption exceeds your provision, you will have to pay the difference.
How does the supplier calculate your instalments?
Each supplier has its own way of calculating the instalment. However, they all base it on your consumption history, while taking account of seasonal fluctuations. That’s why your consumption reading is a necessary piece of information for the supplier. They will use this reading as the basis for calculating your future instalments.
Until March (for electricity) and April 2022 (for gas), instalment bills and adjustment bills were both subjected to 21% VAT. Hoewever, to try to combat the steep rise in energy prices in 2021 and 2022, the government decided to lower the VAT on energy to 6 %, first temporarily, but starting 1 April 2023, the 6% VAT becomes permanent.
You can ask your supplier to change the amount of your instalments if you think it is inappropriate. But remember that whatever you don’t pay now you will pay on the adjustment bill, and vice versa (see below).
How does the supplier receive your consumption data?
What happens if you have no energy consumption history?
If you are moving to a new house that has just been connected to the gas and/or electricity network and no consumption history is available, the supplier will have to rely on other data to issue an instalment bill. They will consider factors such as the size of your house and the number of people in your household.
What happens if you have a variable-price energy contract?
Note that your instalments will always remain fixed, even if you have chosen a variable-price energy contract. When you choose this option, the energy suppliers include energy price speculations in their calculations to estimate your instalment amount. This means that if the gas or electricity price plummets unexpectedly while your consumption has remained the same, you can expect to receive a generous refund!
Your instalment does not seem to match your actual consumption. What should you do?
As we have explained, the instalment is simply an estimate. Your actual consumption may be higher or lower. If you think the difference will be too great, you can contact your supplier to adjust the instalment amount. If, after adjustment, your instalment bill still seems too high, you can compare prices with other gas and electricity suppliers.
The Energyprice.be team is happy to provide telephone assistance (0800 37 456) if you have any further questions about the instalment system in general. You can also ask us to call you back free of charge. Our advisers will be delighted to help you manage your energy contracts more effectively! If you have more specific questions about how your instalment is calculated, please contact your supplier directly.
