According to recent analysis by the Australian Competition and Consumer Commission (ACCC) of more than 1.5 million electricity bills, there are more households on market offers and fewer on default offers.
A market offer refers to an energy plan advertised by a retailer and can include things like discounts and other incentives. On the other hand, a default offer is the maximum amount a retailer can charge for electricity and is typically a bit pricier.
If it’s been a while since you last switched energy retailers or if you’ve never switched retailers, you will most likely be on a default offer.
“We often talk about the lazy tax and how much extra it could be costing Aussies who don’t make the effort to shop around on households expenses, like their energy bill,” said Mozo Director, Kirsty Lamont.
“Recent Mozo research found that in New South Wales alone, switching from the average to the cheapest electricity plan could save households $286 a year.”
So if you’re thinking it’s time you got serious about your energy bill, we’ve jotted down some of the key things to keep in mind when comparing energy plans.
Electricity rates and fees
While there are some aspects of your energy bill you can’t change, like your network charges, you can control the rates and fees you pay for electricity. When you start shopping around for energy plans, get down to the nitty gritty and compare daily supply charges and usage rates between retailers.
Your daily supply charge is a fixed amount your retailer charges to supply your home with electricity everyday, while your usage charge is the cost you pay for the amount of electricity you consume.
It’s also worth looking into the fees a retailer may charge, like early exit, late payment or connection fees. You can also opt to have your bills delivered electronically to avoid a paper billing fee.
Any available discounts
Similar to other personal finance products, retailers also offer sign-up incentives or discounts for new customers. But the trick to sniffing out a top deal is to make sure that benefits are worth it in the long run. For instance, if an energy plan you’re considering has a sign up credit, be sure to check that the rates are just as competitive.
Contract vs no contract
You’ll also need to decide whether you’d like to sign up for a contract energy plan. While you might like the idea of having a fixed price for a year or two, keep in mind that it also means you won’t have the flexibility to switch if a better value offer comes along.
Ready to make the switch? Head on over to our energy comparison tool!