Energy Made Easy Guide
These days, you can barely get through the day without hearing about aging power plants and sky-high electricity bills. While the Turnbull government is doing its bit to ensure that we all get a better electricity deal by making energy providers now tell us when that great deal we signed up to 12 months ago expires, we could still all do with a quick refresher on electricity plan basics.
That’s why we’ve pulled together this energy made easy guide, to help you understand the difference between a time of use meter and a single tariff and how discounts are calculated.
Read on, so that when that energy company comes calling or you compare offers yourself online you’ll know exactly what to look for in a great deal.
Start comparing energy below!
The types of energy plans available.
One of the most important things to remember when choosing your electricity plan is that there isn’t a single cheapest plan for everyone, but there is going to be a cheapest plan for you. Why? Well, we each have different needs when it comes to energy usage in our households and the company responsible for servicing our homes with electricity is different depending on where you live so there isn’t a set fixed cost for the supply of electricity.
Electricity retailers are the companies that you’ll deal with when choosing an electricity plan and each retailer will have different plans to choose from. Here are some of the most common plan types:
Market Offers - These will usually be the most current deal that’s available with the electricity retailer. Many of these plans will have discount based incentives, either off the supply and usage charges or usage charges only, when you meet set criteria such as paying by direct debit.
Dual Fuel - This involves having your gas and electricity all come from the same energy provider. Along with its convenience, you could also be offered discounts by choosing the same provider for both services.
GreenPower - If you’re after an environmentally responsible option with the GreenPower Program, you can select an amount of GreenPower (between 10% - 100%) that is to be offset by your provider based on the amount of energy you use. So say you use approximately 15 Kwh of electricity a day and you purchase a 30% GreenPower plan, your electricity provider would be required to add 5Kwh of renewable energy to the grid on your behalf.
Prepaid power packs - Like a prepaid mobile phone plan, some energy providers, like Powershop allow you to prepay your power. While this gives Aussies the opportunity to control how much energy they use to lower their bill, it also means that you need to regularly track your usage and buy in advance so that you don’t get charged the standard usage rates which are higher.
Time-of-use plans - This is a plan that allows you to be charged at different rates according to the time you’ve used energy, for example, during peak, shoulder or off peak times. You’ll only be able to get this type of plan if the meter that’s installed at your property allows for this, such as a smart meter. It means that during peak energy hours, you’ll be charged a higher rate whereas during shoulder and off peak times, you’ll be charged a lower rate.
How can I calculate the cheapest electricity plan for me?
Your electricity bill amount is based on three key things:
Your usage - Your electricity provider will charge you for every kWh of electricity you use - the more you use, the more you’ll pay and vice versa. Depending on your provider, it might be shown as cents/per kilowatt hour (c/kWh) on your bill.
Your electricity meter -The type of meter you have will depend on where you live and the age of your home. If you have a smart meter or a time of use meter, you could be charged different rates depending on the time of day. If you have a single tariff meter, you will be charged a single tariff regardless of the time of day.
Your electricity plan - Your electricity plan will determine the supply charge, tariffs (fixed or variable) and any other rewards or discounts you receive, which will be applied to your electricity bill. A supply charge is a fee that you pay in order to have electricity supplied to your home and it is usually charged on a cents per day rate.
To find out which plan is going to be the cheapest is actually easier than you think, especially if you’ve got a recent bill in front of you, Mozo’s electricity comparison tool allows you to compare some of the electricity plans available in your postcode. You can customise the results to ensure that you’re getting the best plan for you.
What do I need to know about discounts?
Many energy providers offer incentives like discounts or rewards to their customers. Customers can receive discounts on their bill for the following:
- Pay on time discount (by paying the full amount before the due date)
- Bundling discount (if you get both gas and electricity from the same provider)
- Direct debit discount (if your provider takes the money for the bill straight from your credit or bank account)
- Paperless billing discount (when you choose to receive your bill by email, not post)
Depending on your provider, you may also be given a benefit or reward for a set period of time, often called a ‘benefit period’. For example, if you are a new customer signing up, you may be offered a 12 month benefit period, where you’ll get a 10% discount on your bill. Once the 12 months have passed, you will still remain on the same plan, but will no longer receive the 10% discount.
It’s important to remember that one the set period ends, you will have to start paying full price and that your energy provider does not have to tell you when this is. This is why it’s important to mark these important dates on your calendar so you can start shopping around in advance for a better deal.
The other extremely important thing to understand about discounts is that a 10% discount with one energy provider could actually be a bigger cost saving for you, than if you were to go with a plan that was offering a 20% discount. Why, well it depends on the rate that you are getting the discount off. This is why when we built our comparison tool we made sure that we took all the discounts into account and rank the plans based on cost that you’d actually pay if you were to get that plan.
How do I switch providers?
If you’ve found a better deal using our energy comparison tool (congrats!), all you need to do now is click on the deal in order to be redirected to the provider’s website or contact them directly. Here are a few details you can be expected to provide:
- The supply address
- NMI (national meter identifier), this is the meter number and can be found on your bill
- Your direct debit details, like your bank name, BSB or account number
Will I be charged to switch?
There are a few energy plans that still charge an exit fee to switch but generally the cost of this fee will be a lot lower than the amount of money you are set to save by switching plans so it shouldn’t be a massive barrier for you. This will need to be paid to your current provider.
If you’re moving house, you will need to pay a connection fee for your new address. You will generally have to pay this whether you are switching providers or staying with your existing one. The cost for this is most likely be added onto your first bill.
The important thing to realise is that there will be no disruption to your service if you choose to switch providers. But depending on your last meter reading, it can take several weeks or months for you to receive your first bill from your new provider once you have switched.
Got any more tips to save on energy?
Mozo’s Energy Experts number one energy savings tip is to mark a date in the calendar and every 12 months shop around to make sure you’re always on the best deal. Even if you don’t want to switch providers be prepared to haggle.
There are a few other simple ways to lower your energy bill that won’t cost you anything:
Wash clothes in cold water - Clothes wash the same regardless of the type of water they’re washed in, so do your bank account a favour and start washing your clothes in cold water. Plus, if there is no urgent need or event to have them dry immediately, skip the dryer and hang your clothes out to dry on the line or clothing rack.
Switch appliances off at the wall - Do you know where 6% of your total energy bill is coming from? It’s coming from those appliances you keep switched on even when you’re not using them! Whenever you’re done with an appliance, make sure to switch it off at the wall and watch your energy bill drop.
Avoid using energy during peak hours - If you’re on a time-of-use plan, avoid using your heating or cooling systems during peak hours, which are typically from 2pm - 8pm on weekdays. Plus, if you’re from Victoria, you could save up to $500 on your annual bill and earn credits as a reward for reducing the demand on the power grid, thanks to the new demand management strategy!
Use a timer on heating and cooling systems - Leaving your aircon on all day may make you feel great temporarily, but you won’t feel so cool later when you see your energy bill. Use the timer on your cooling or heating system to automatically turn the appliance off after a set time. If your aircon or heating system doesn’t have this feature, use the timer app on your smartphone.