A beginner's guide to different energy plans and products
Energy plans are like shoes. One type doesn’t fit all. Just because something works for your neighbours, doesn’t mean it would for you too. That’s why, it’s important to understand which electricity and gas products are available and find the ones that are best suited to your home.
We’ve created this energy guide that explains the different energy products in simple and clear terms so you can make sure you get the best deal. Let’s get started:
What does it mean: Dual fuel is when you sign up with the same provider for both your gas as well as electricity services.
The upside: It’s convenient to deal with just one provider for both services and many energy companies offer discounts if you sign up with them for dual fuel services.
The downside: Despite the discounts, it’s possible that when you compare energy plans and prices, you could find it cheaper to get your gas and your electricity from different retailers.
What does it mean: The GreenPower Program is a government managed scheme that lets you match your electricity consumption with certified sustainable power. Wondering how that works? Essentially, when you buy a GreenPower certified product from your energy provider, they buy the equivalent amount of electricity as specified by you from accredited renewable energy generators. This renewable energy will not be directly supplied to your home but it is pumped into the grid by the provider on your behalf.
The upside: This is a good option for the environmentally conscious Australians who want to support renewable power in the country. You can nominate the percentage of GreenPower to be purchased from 10% up to 100%.
The downside: Renewable energy products generally cost a little more than energy that is produced using fossil fuels because at this point it involves building a new infrastructure for the power grid. In general, when you choose to buy 100% GreenPower, the cost is around 5-8 cents per kWh more than the standard current electricity rate. If you opt for a smaller proportion of say, 10-25% GreenPower, you will only have to pay about 80 cents to $1 a week extra.
Prepaid power packs
What does this mean: Think of this as a similar deal to a prepaid plan for your mobile phone. Just like you can prepay for the calls you’re going to make in a month or the amount of data you’re going to use, companies like Powershop let you pre-purchase power for your home at a set price.
Upside: Prepaid power packs can help you save money and reduce the chance of bill shock by helping you budget better depending on when your home’s energy needs are more.
Downside: If you’re the set and forget type of person then you may find tracking and updating powerpacks regularly a bit tedious.
What does this mean: Bill smoothing refers to a payment plan where instead of receiving quarterly bills, the energy supplier gives you the option to spread estimated power costs across equal monthly, fortnightly or even weekly installments. If you’ve been with the same supplier for more than a year, these costs are estimated based on your annual energy usage. For new customers, the retailer calculates the cost using other customer usage data in your area.
Upside: It’s a great way to avoid bill shock because instead of letting payments pile up over an entire quarter, you can opt for more reasonable installments that are easier on the pocket.
Downside: At the end of the day, you are being charged ‘estimated’ costs so you need to make sure you do check the meter once a quarter to see in case you’ve been overcharged. If you do detect any inconsistency, let your provider know so they can adjust this amount on your next bill.
What does this mean: A time-of-use or flexible pricing plan means that you’ll be charged different rates for using energy during peak, shoulder and off peak time slots. So you’ll have to pay higher rates for using electricity at peak hours, lower rates during the shoulder period and the lowest rate at off-peak times.
Upside: Time-of-use tariffs are ideal for people who have the flexibility to regularly use energy in non-peak times.
Downside: This will not turn out to be a cheaper plan for people who don’t have the option to switch their energy consumption timings to non-peak periods.
Energy comparison tools
The easiest way to decide what is the best power plan for your home is to use an energy comparison tool, feed in your postcode and some other basic details about your household’s energy usage patterns to get results tailored to your unique requirements.
And the best thing about comparison tools? There’s no downside to them at all!