Many households and small businesses still battling ‘energy debt’
When Australia officially entered lockdown in March, thousands of people and small businesses were left stranded with a reduced income or forced to shut down, struggling to keep up with regular expenses, like their energy bill.
And according to the Australian Energy Regulator’s (AER) Annual Retail Markets Report, those households and small businesses still remain in ‘energy debt’ to their retailers.
The report found a sharp increase in energy debt amongst small businesses, with the total jumping from $35 million in March 2020 to $45 million in June 2020.
For residential customers, long-term electricity debt reportedly increased by 21% between 31 March and 2 November to $124.5 million.
Almost 60,000 households also took advantage of their retailers' offer to defer energy bills for a time, providing some breathing room.
“If you are struggling to pay your bills, talk to your retailer about your debt – even if you can’t afford to pay anything right now,” said AER chair, Clare Savage. “You won’t be disconnected, and your retailer will work with you to set up a plan and help you start paying off your debt.”
And it looks like most Aussies were satisfied with their retailer’s support, as there were 29% fewer complaints made to retailers and 26% fewer complaints to the ombudsman since the 2018/19 financial year.
Market competition and savvy switchers on the rise
As wholesale electricity prices continue to fall, Aussies might be happy to hear of one other reason their energy bill could decrease: the AER found that smaller retailers have increased their market share in both the electricity and gas market, providing greater competition to further drive down prices.
Aussies are also now more likely to shop around and switch to a better deal, as the report revealed that residential electricity customers on market offer contracts increased to 76% during the 2019/20 financial year.
“With the combination of falling prices, smaller retailers providing competitive offers, and new retailers entering the market it’s a good time for customers to shop around,” said Savage.
So if you’d like to find out how much you could be saving on your energy bill, make your next stop our energy comparison tool.