For many Australians, the quarterly energy bill is one of the biggest — and most vital — household expenses. That’s why it’s worth spending some time checking that you’ve got the best deal possible.
While price is the primary consideration for most people, it’s not the only one. Is your energy provider reliable, and helpful when there are problems? Is their billing system transparent and easy to understand? What energy mix do they provide, and how do renewables feature?
Choosing the best energy provider can feel daunting, but the rewards are worth it. Here’s what to consider before you make the switch.
Energy provider prices vary considerably. Thanks to complicated billing structures, heavy ‘on time’ discounts and other incentives, those prices can be hard to compare.
Tempting though it is, try not to choose the cheapest up-front deal without doing more research. Many energy companies offer a ‘new customer’ discount for the first billing cycle or the first year, after which the price goes up. Others offer incentives, such as frequent flyer points, which might represent a true saving for one customer and be no use at all to another one.
When you’re comparing prices, make sure you look at:
• All fees and charges, including late fees or credit card fees
• Whether the offer is suitable for your usage – some providers offer discounts for large energy consumers, which is great for large households who work from home, and less suitable for a single person who is rarely there.
• Whether the contract is a ‘standard contract’ which cannot be changed, or a ‘market contract’. The latter might be cheaper when you sign up, but also allows the energy provider to change their terms and conditions at will.
Is it worth saving $10 a quarter if you lose out on great customer service?
Some cheaper energy providers may be cutting their overhead — including their customer service reps — to offer those great rates. That might mean that you experience long delays when you need to call or email your provider. Some companies use offshore call centres, which you might want to factor into your thinking.
Look at their social media presence, as well. Do they respond promptly to complaints online, and are their reviews positive? A company that offers multiple ways for a customer to get in touch is likely to prioritise customer service.
Increasingly, retailers also offer tools to help you keep an eye on energy usage and make adjustments. These might include apps that tell you how much power you’re using in real time or give you a guide to the running costs of each appliance. If those services are important to your customer experience, consider whether they’re worth paying a little extra for.
Energy providers vary considerably when it comes to renewables and green energy credentials.
• Some offer carbon off-setting and/or GreenPower, which supports local or global renewable energy development. This may be an additional cost on top of your current tariff.
• Some offer a mix of renewable or ‘clean power’ as well as fossil fuel derived energy to their consumers. Look for companies which own renewable energy assists such as wind or solar farms.
• Some are vocal about promoting green energy credentials, or support clean energy initiatives: for example, by offering EV energy plans to encourage take up of electric cars.
You can check the Green Energy Guide, available from Greenpeace, for their ranking of energy providers on environmental grounds.
How should you go about making the switch?
1. Look at your current plan. Note the daily supply charge and general usage rate. If you have solar, look at your feed-in tariff.
You may have:
• A single flat usage rate or rates that vary depending on time of use (on- and off-peak time rates). In this case you will probably also have a ‘controlled load’ rate for appliances that only work at off-peak times, such as hot water systems.
• Stepped rates that depend on the amount of energy used.
2. Check comparison sites for other retail plans. All energy retailers have to publish a fact sheet with their usage rates. You can find these on energymadeeasy.gov.au.
• Look at the usage rates (including stepped or time-sensitive rates) and supply charge for each.
• If the provider offers discounts, make sure you understand if the discount applies to the total bill or usage only.
• Are there any hidden fees, for example fees for credit card payments, paper statement fees or fees for breaking the contract or switching premises?
3. Ring your current retailer and ask them if there is a cheaper plan they can switch you to. Tell them you’re looking for a better deal, and see if there are incentives they can offer to stay with their company.
Tick this one off the to-do list today. You’ll be glad you did!