Looking for a cheaper energy plan? Watch out for misleading discounts
Aussie households looking to switch energy providers in light of the July 1 price hikes have been urged to compare deals carefully, as the various discounts being offered can be misleading to the untrained eye.
Thousands of customers in the deregulated states of New South Wales, Queensland, South Australia and the Australian Capital Territory, are set to see their bills rise next month as a result of increasing wholesale prices.
However, Mozo’s Product Data Manager Peter Marshall has warned those in the market for a new energy deal to take every discount advertised with a grain of salt.
“When shopping around for a cheaper energy plan, make sure you’re comparing apples with apples, as there are so many different types of discounts with some only applying to a portion of the bill,” he explained.
“That’s why it’s really important for consumers to look at the overall cost of the energy plan being advertised, which is obviously difficult if you’re not a numbers person.”
According to data analysis conducted by Mozo, the average* household living in NSW would save $128 annually if they opted for Red Energy’s Living Energy Saver plan with a 10% pay on time discount (off the total bill), compared to its competitor Dodo’s Power & Gas Market Offer with a 20% pay on time discount (usage charges only) attached.
As you can see, it really does pay to look beyond the advertised discount. If you want to generate a calculation of your own, the good news is that Mozo’s energy comparison hub factors in all the varying discounts and usage charges so you can see the cheapest deals in plain english.
*Based on the average usage per three person household in NSW which is 1,633 kWh per quarter.
Tips for comparing energy discounts:
- Take stock in longer term incentives. Sure, that $70 off your first deal sounds competitive, but you’ll probably get more bang for your buck over time if you opt for a provider with lower tariffs per kilowatt and generous pay on time discounts.
- Consider bundling options. If you consume not only electricity in your home but gas too, make sure you include the energy providers offering dual fuel plans when shopping around.
- Read the Ts and Cs. Watch out for exit fees so you don’t get stuck with the one provider or have to pay more just to make the switch. And if you’re not one to pay your bills on time, you may want to disregard pay on time discounts.