Subscription savvy: are prepaid energy plans the future?
Friday 29 November 2019
Netflix, Spotify, Stan, it’s safe to say that subscription services are making paying for everyday services easier than ever.
After all, there’s only one flat monthly fee to remember and what you use the service for doesn’t necessarily change.
And it looks like energy retailers have even caught up to speed with the country’s subscription craze.
On Monday, energy giant EnergyAustralia launched two new electricity plans for new and existing customers in New South Wales.
With the ‘Easy Plan’ and ‘Easy Plan Plus’, customers are able to purchase electricity at a set monthly price, rather than paying for the electricity they’ve used.
Under the ‘Easy Plan’, customers can choose from five different ‘sizes’ of electricity usage - XS, S, M, L and XL.
To put things into perspective, according to the retailer, a 3-4 bedroom household in Western Sydney using around 10,150kWh a year would pay $214 every month over 12 months.
EnergyAustralia are not the first retailer to trial something like this though.
Back in April this year, Mozo reported on energy retailer and telecommunications provider, amaysim, releasing its version of a subscription energy plan.
With the news of energy retailers taking their products to the next level, we thought it was a good idea to sit down with Mozo energy expert, Nathan Warne, for his take on whether this could be the future for the energy industry.
“When you think about the current subscriptions you have, there’s a good chance you pay them on a monthly basis, making it easier to factor into your monthly budget,” he said.
“Paying for your energy on a monthly basis can create a sense of awareness for a household as they become conscious of the amount of electricity they have for the month, helping them conserve their usage and avoid bill shock down the track.”
But despite the benefits, Warne went on to explain that a subscription-style electricity plan may not be the right fit for every household.
“Electricity plans like these can be quite high maintenance in that they require you to actively monitor your usage to make sure you don’t exceed your purchased amount,” he said.
“So if you prefer a ‘set and forget’ option for your utilities, this might not be the right product for your home.”
The future of energy plans
And when asked whether prepaid energy plans had a place in the future of the energy market, Warne said:
“While it’s great to see innovation make its way through the energy market, I don’t think prepaid energy plans will become the norm because of a few issues that a customer may run into.”
“For instance, if a household goes over their purchased amount they’ll be charged a top up fee, which might not be the best value, especially if they’re consistently exceeding their plan amount.”
So if you prefer to keep your energy plan ‘old fashioned’, head on over to our energy comparison tool to start comparing energy plans in your area.