Learn to uncover best energy deals efficiently with our insightful guide. Save money while securing the best power plans!
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Energy bills are a significant part of any household expenses. But with so many different retailers and energy deals available these days, it can be confusing to know where to start. So, we’ve put together this guide to help you find the best energy plan for your needs.
One of the first things to know about energy supply, is that the energy market is regulated in different ways across Australia.
If you live in New South Wales, Victoria, South Australia or South-East Queensland, you’ll have a greater choice of energy retailers. That’s because these areas are deregulated, allowing for greater competition.
However, if you live in Western Australia, Tasmania, the Northern Territory, or areas in Queensland outside South-East Queensland, you’ll have less choice. That’s because these areas are regulated. But don’t worry if you live in one of these areas. Even if there is only one energy retailer available, you will still have a choice of energy plans. And finding the best electricity plan to suit your needs could make a big difference to your energy costs.
Several factors should be taken into account when searching for a new energy plan.
If you have an interval meter (time-of-use meter) or smart meter, you’ll be able to take advantage of time-of-use tariffs. Time-of-use tariffs, such as peak and off-peak rates, can help you save money on your electricity. Whereas, if you have one of the older-style flat-rate (accumulation) meters, you’ll only be able to sign up to a plan with a single rate tariff.
A tariff is the rate charged for each kilowatt hour (kWh) of electricity used or each megajoule (MJ) of gas used.
There are four types of electricity tariffs:
Single rate tariffs
With a single rate tariff, you’ll pay the same rate for your energy, regardless of when you use it. Single rate tariffs can also be called flat rate, standard rate, anytime rate or peak rate. Any household can sign up to a single rate tariff, as you don’t need a smart meter or interval meter.
Time-of-use tariffs
A time-of-use tariff charges different rates for different times of the day. Types of time-of-use tariffs include peak, off-peak and shoulder. Peak costs the most, as this is when demand for electricity is at its highest. Off-peak is when the demand for the energy is the least and is the cheapest. And shoulder sits in between the peak and off-peak periods. Peak rates usually apply in the evenings, Monday through to Friday. Off-peak rates usually apply overnight and on the weekends.
Controlled load tariffs
Controlled load tariffs are usually applied when an appliance, such as a hot water system, has its own meter. If you have slab or underfloor heating, you may also see a controlled load tariff on your electricity bill. It can appear on your bill as ‘dedicated circuit’, ‘tariff 31’ or ‘tariff 33’.
Demand tariffs
Demand tariffs can only apply to homes with smart meters. If your home has many appliances running at the one time, a demand tariff might be charged by your electricity retailer.
Gas plans only come with single rate tariffs. However, you might see tariff blocks on your gas bill. Tariffs blocks can charge one rate for the first part of your usage then a different rate for ongoing usage. They can also apply to daily, monthly and quarterly usage. Plus, sometimes retailers charge seasonal rates. These seasonal rates will usually be higher during winter when demand for gas is greater.
Are you at home during the day or on weekends? You might be able to benefit from a time-of-use tariff. Whereas, if you use most of your energy during the night time peak, you might be better off with a single rate tariff.
If you’re renting or moving in the near future, be aware of special offers that lock you in for an extended period of time. Limited time offers can look great at first glance, but make sure you check the fine print before signing on the dotted line.
Solar systems can offer significant savings to households. If you have one installed at your home, consider the solar feed-in tariffs offered by retailers. These feed-in tariffs give you money back on any surplus electricity you export to the electricity grid. So, don’t forget to factor these in when looking at electricity plans.
Only 13% of Australia’s electricity is generated from renewable energy. However, if you want to support the renewable energy industry consider choosing an energy retailer that offers GreenPower.
GreenPower is a government initiative that allows households and businesses to support renewable energy. By choosing a GreenPower product, your provider is committed to buying the equivalent amount of energy from renewable sources such as wind, solar and hydro. This renewable energy is then added to Australia’s electricity grids on your behalf.
When buying a GreenPower product, you can choose the amount you want. And this will vary depending on the retailer you choose. For example, some retailers might give you the option of 10%, 25% and 100% GreenPower.
Some energy retailers also give you the option to offset your carbon footprint for no extra charge.
1. Know your current plan’s details
You’ll find the name of your current electricity or gas plan on your energy bill.
It’ is usually listed under the ‘Usage and service calculation’ section. It might be called something like ‘Flexi Saver’. The names will vary between retailers. You’ll also find your plan’s tariffs and charges listed here.
Tip: Not sure where to find these details on your energy bills? For more information on how to read your energy bills.
2. Check your average daily energy usage
Most electricity and gas bills will also display your average daily energy usage.
Take note of this, as you’ll be able to use it to calculate your potential savings when comparing energy plans and tariffs.
3. Compare best electricity plans
The easiest way to find the best energy deals is to compare plans online. With just a few clicks you’ll be able to compare the energy plans available in your area. Once you’ve found the best electricity and gas prices, compare them with your current plans to see if you’ll be better off switching. If the prices you see are better than your current plan, but you don’t want to switch retailers, give your energy retailer a call. Tell them you’ve found a better deal and ask them if they can match the offer. However, if they offer you a discount, don’t assume it’s a better deal. Discounts and offers can have conditions attached. Or they might come with higher usage rates. So, make sure you check all the details before signing up.
Usage Charges vs Supply Charges
Usage charges are the amount you will pay for energy you use. If you have a medium or large household, the usage charge will usually make up the greater part of your electricity bill. Whereas, supply charges are the amount you will pay for having your electricity supplied to your home. It covers the cost of installing electricity poles and maintaining the network. Supply charges will be a fixed amount and usually range between $1 and $2. Even if you don’t use any power, you will still need to pay the supply charges.
Key Points to look for when comparing energy plans
A good energy plan will offer:
However, sometimes, the best energy prices may only apply for a set period of time. Or other charges on the bill may be a lot higher. So, here are some things to be aware of when looking for a new energy plan.
With a market retail plan, the prices are set by the energy retailer and the prices can change at any time. The prices can even go up after you’ve just signed up to the plan. However, the retailer will need to let you know about the price change no later than your next bill. On the positive side, market retail plans can offer discounts. For example, they might fix the price for a set period. This can be called a price freeze, fixed price or price guarantee.
In contrast, with a standard retail plan, the prices are set by the government and you won’t be able to get any discounts. Rates will generally be higher than market retail plans. Also, if you’re looking to change plans, you’ll only be able to do this once every 6 months.
You might be on a standing retail plan (or standing offer) if you’ve lived in the same place for several years, you’ve never had a market retail plan, or it has expired.
A good thing about standing retail plans is that the retailer must do more to warn you of any rate changes. Plus, if you don’t pay your bill, there is a minimum amount of time before your energy supply can be cut off.
‘Fixed term’ doesn’t mean fixed prices
If a plan states it is for a ‘fixed term’, this refers to the period of time your contract lasts for. It doesn’t mean the rates are fixed.
Fixed rates and termination fees
If energy prices are rising, locking in a fixed rate might be good way to save on your energy bills. However, on the flip side, if energy prices start to fall and you want to switch to a cheaper plan, you might have to pay a termination fee.
Credit card payment fees
Some energy retailers charge a fee for using credit cards. So, if you pay your bill using a credit card, don’t forget to factor this in when calculating the costs.
Confusing discounts
While the idea of discounts is good, you’ll need to do your homework to make sure that you won’t be hit with other charges or fees.
When comparing discounts, check whether they are ‘conditional’ or ‘unconditional’.
Conditional discounts
To receive a conditional discount, you’ll need to meet a condition.
These can include:
But, be aware if you fail to meet the condition of the discount. This could result in you losing the discount and having to pay a late fee.
Unconditional discounts
In contrast, if a discount is unconditional there will be no specific conditions that you need to meet to receive the discount. For example, an energy retailer might advertise a promotional offer where you can save X% for the first 12 months. With this discount, there may be no conditions for the first 12 months. However, after the promotional period ends, the prices could rise significantly.
Discounts might not apply to the whole bill
If you receive a discount as part of your energy bill, ask your retailer if the discount is a usage charge discount or a whole-bill discount. As this could make a big difference to how much you pay and how much you could save.
Most discounts will apply to usage charges only. While some retailers might apply the discount to the whole bill. However, a whole-bill discount won’t always be the best. For example, a 10% discount on usage charges could mean result in a cheaper energy bill than a 5% discount on your entire bill. This could be especially the case if you use a lot of power in your home.
Fees can add up
Fees can also have an impact on the overall amount you will pay for your energy supply.
Here are some fees to check for:
All tariffs, charges, fees and conditions should be included on the retailer’s written summary of the plan. This is required by law. So, make sure you check all the details before committing to a new plan.
It might not be cheaper to combine your electricity and gas bills. For households that have both electricity and mains-supplied gas, moving your plans to the same retailer may offer some savings. Some retailers might offer you a discount for moving. But make sure you check each plan’s rates are still competitive.
You “don’t need to switch”
If a retailer says you don’t need to switch, this might mean you don’t need to switch energy distributors. However, you might need to switch energy retailers, and this could involve extra charges.
Tip: If you are unsure about what a new energy plan includes, make sure you take the time to check all the details. Asking a family member or friend to go through the details for you can be helpful.
The Australian Energy Market Commission has reported that households could save up to $760 on your power bills by switching to a cheaper plan. So, it could really be worthwhile switching. Look for your best gas deal and electricity plan.
Depending on where you are in your billing cycle, the switching process can take one to three months to complete. If you have a smart meter, the process can be quicker as the meter reading can be taken remotely. If you want to switch sooner than your next billing cycle you can request an extra meter reading. But note, there may be extra fee to do this.
What if I change my mind?
By law, energy retailers need to give you a cooling-off period of 10 business days. This means you have 10 days to change your mind or cancel the contract without paying any exit fees.
Things to check before switching to a best electricity deal
Contact your electricity or gas retailer for questions about:
Contact your electricity or gas distributor for questions about:
Other things to consider
OK, so you’ve seen a shiny new electricity plan, but to take advantage of the time-of-use pricing you need to have a new electricity meter installed. Will it be worth the cost?
In Australia, all new and replacement meters are now smart meters. Installing a smart meter can cost around $600, but this will vary depending on your location. So, always check with your retailer how much a new meter will cost. Also check if you will need pay for the meter upfront or whether it will be included as part of your energy bill.
As a guide, the longer you plan to stay in your home, the more opportunity you will have to benefit from the savings you could make from time-of-use pricing. However, make sure you do your sums before committing to any new purchase. If you decide to get a smart meter, installation can take around 15 business days.
To learn more about the different types of meters, seeElectricity and gas meters explained.
Solar systems are a significant financial investment. So, consider how long you will be living in your current home. As the longer you live in your home, the more time you’ll have to earn back the cost of installation.
To work out how long it will take to pay off a solar system, first work out how much money you could save each year by using solar power. Then divide the cost of your solar system by this amount. This will give you the number of years it will take to pay off your solar system.
For example, in New South Wales, using a solar system can reduce a household’s electricity bill by around $400 per year per kilowatt of solar. That means, if you have an 8kW solar system, you could save around $3,200 a year. And if the solar system cost you $9,000, it will take just under three years to pay off the purchase.
To learn more about solar systems, see A little guide to solar.
Tip: When you take out a new plan, set a reminder in your calendar for a month or so before any benefit period expires. By doing this, you’ll have plenty of time to ask your retailer if they can reinstate the offer for you. Plus, if they can’t offer you the same offer or a better one, you’ll have plenty of time to look for a better energy deal elsewhere.
Start looking for the best electricity and gas prices
One of easiest ways to find the best energy deals in your area is by going online. For example, with Econnex you compare energy deals in your area in just a few clicks. And once you’ve found one that suits your needs, they can even begin the switching process for you.
