The perfect storm: Households energy bill pain on the rise
Energy prices heat up as competition freezes over, leaving Aussies out in the cold
23 November 2022
- The number of active energy providers in Australia has almost halved since October 2021, down from 44 to 24.
- According to the ACCC electricity bills have increased by $300 on average since April. Treasurer Jim Chalmers also indicated that bills could rise by a further 56% over the next two years
- Mozo’s annual review of energy and gas plans found comparing and switching could save Aussies $464 a year on their power bill and $204 on their gas bill
- 39% have never switched energy providers, and a further 33% haven't done so in over a year
- Alarmingly, 1 in 10 Aussies are already in debt to their energy provider
- 20% require assistance in paying their energy bill, either from government packages or their provider
Australian households are facing rapidly shrinking choices for their energy plans, with analysis from financial comparison site Mozo.com.au revealing that the number of active energy providers in Australia has almost halved since October 2021, down from 44 to 24.
The finding comes as the ACCC has announced that the average Australian energy bill has increased by $300 since April. Treasurer Jim Chalmers has also indicated that bills could rise by a further 56% over the next two years.
“This really is the perfect storm. Energy prices are surging and many of the smaller providers have been forced out of the market, leaving consumers with significantly fewer options when searching for a better deal,” said Claire Frawley, Personal Finance Expert at Mozo.
Mozo’s annual Expert Choice Awards analysis of energy and gas plans found that households in New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory could save an average of $464 on their electricity bills and $204 on gas by comparing providers and switching to a more competitive deal.
Despite this, Mozo research found that a staggering 39% of Australians have never switched energy providers, and a further 33% have not switched in over a year.
“Households don't need to pay top dollar for their energy. Our analysis found that there are savings of up to $600 a year on offer, which is nothing to sneeze at.”
Alarmingly, Mozo also found that 1 in 10 Aussies are already in debt to their energy provider, while 20% have asked for assistance from their provider or accessed a government package.
“It’s concerning to see that so many Aussies are already in debt to their energy providers, as this can make it more difficult for them to switch to a cheaper alternative. This should be a wake-up call for those starting to feel the pinch to act now,” Frawley says.
To determine the best value energy plans, Mozo’s experts analysed 1,075 products from 32 energy retailers. The awards recognised the following providers as having the cheapest electricity plans in each state:
New South Wales - Nectr and Powershop
Victoria - 1st Energy and AGL
Queensland - Nectr
South Australia - Origin and Sumo
Australian Capital Territory - ActewAGL
Tasmania - 1st Energy
Tips for managing the rising cost of electricity:
- Install a smart meter to monitor energy consumption or manually submit your meter reading - A smart meter will measure and record household energy usage in real-time. This can be a great way to avoid estimated bills as the device automatically sends the reading to the provider. If a smart meter is not a viable option, get into the habit of submitting a meter reading manually.
- Get on the phone with your energy provider - A good question to ask is if you are on a standard or market contract. If you haven’t switched providers in a while then you could be on a standard contract or on a default market offer, which despite the name, is often more expensive.
- Start practising energy-saving behaviours - See which of your household appliances are the most power-hungry using the Governments appliance power calculator. Try to be more vigilant with switching off items that chew through lots of energy or consider upgrading to an appliance with a higher energy efficiency rating.
- Stay up to date with market changes & compare plans - Keep an eye out for announcements from providers, energy regulators and the government and regularly compare energy providers to keep bills as low as possible.
- Search for rebates or assistance programs - The government offers a range of rebates and assistance programs, so if you’re really feeling the pinch, see if you qualify.
Notes: Mozo commissioned a nationally representative survey of 2,297 Australians conducted by Researchify in August 2022. Average energy savings were calculated using analysis from the 2022 Mozo Experts Choice Energy Awards data for QLD, NSW, VIC, SA and ACT. Energy price data is extracted from the Energy Made Easy (NSW, QLD, ACT, SA) and Vic Energy Compare (VIC) sites. The difference in cost between the least expensive plan, and the average energy plan price, determined the savings figure.