How To Choose Electricity Provider
Are you wondering what factors you should consider when deciding how to choose a new electricity provider? Find out all you need to know here with Savvy.
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Are you wondering how to choose your electricity provider? Choosing the right electricity provider is essential for ensuring you get a cost-effective plan, and a retailer that you’re happy with. With many electricity plans available in Australia, deciding between retailers and plans and making an informed decision can be challenging. Understanding your needs and preferences, comparing plans, rates, and tariffs are crucial steps in this process. Here Savvy provides valuable insights and tips to help you navigate your way through the different choices you have, so you have the knowledge to select an electricity provider that fully aligns with your personal needs.
How do I choose the best electricity provider?
Not all Aussies have the luxury of choice when it comes to their electricity provider. In some areas, for example the Northern Territory and in more remote parts of WA, you may not have a choice about who provides your energy plan. This is because in these regions, the energy supply is controlled by the state government, and there may only be one supplier to provide power.
However, in most other areas of Australia (with the possible exception of parts of Tasmania) you will have multiple providers to choose from. Here’s some of the factors you should take into consideration when deciding which energy retailer to pick:
Factors to consider when choosing an energy provider
- Green energy options – is supporting renewable energy providers important to you? If so, look for a provider who has good green credentials
- Solar feed-in options – do you have a solar power system? If so, you’ll need to look for a provider who has cheap solar plans and offers a good feed-in tariff for the excess power you feed back into the electricity grid
- Bundling options – are you wanting to have your gas and electricity (and even your internet or insurance) with the same retailer to take advantage of bundling discounts? If so, look for a provider who offers bundling discounts, which typically offer discounts of between 5% and 15% for having more than one service with the same provider
- Type of contract – are you happy to lock in your electricity plan for a year or two? Or would you prefer to be free to switch providers more frequently? Choose between a standard contract with no exit fees, or a market contract which commits you to a particular provider unless you want to pay exit fees to switch
- Suitable tariffs – do you want to pay the same price for your electricity no matter the time of day? Or would you prefer to have a more flexible tariff so you have the choice of cheaper electricity tariffs? If so, look for a provider who offers time-of-use tariffs
- Sign-up bonuses – are you keen to get paid an incentive to switch providers? If so, look for a retailer that offers a sign-up cash bonus, which can be between $50 and $150. Such bonuses can help offset exit fees and provide incentive to switch providers
- Rewards points – do you actively use a particular frequent flyer program or rewards program? If so, and you’re keen to boost up your points, look for an electricity provider who also offers rewards or frequent flyer points to your favourite airline loyalty program
- Discounts – are you looking to make the most of available discounts, such as pay-on-time or direct debit discounts? If so, look for providers who offer many different discounts you may be able to take advantage of
- Fees and supply charges – we all hate paying fees, so compare the fees and supply costs charged by different retailers to find the provider which offers the best electricity plan for your needs
What are the different types of electricity plans available?
When searching for the best energy plan for your household, there are several different types of plans to compare. Some of the common types of electricity plans include:
- Standard electricity contracts:
Standard electricity contracts (also known as default plans) offer electricity at prices set by the Australian Government through the Default Market Offer (DMO). The DMO is the default price of electricity which applies if you live in NSW, SA and parts of QLD. The DMO rates are set by the Australian Energy Regulator (AER). This reference price was created so that it's easier for you to make a comparison between the price of different electricity plans.
Standard contracts do not have any exit fees, so you can switch to a market plan any time you like without penalty. They offer the benefit of stable prices, as price increases can only happen once every six months. However, they may not offer the cheapest plan available and so can end up costing you more in the long run.
- Market contracts:
Market contracts are the plans that most Aussies are on. They’re the ones that retailers offer to the public with bells and whistles to attract new customers. They often come with special conditions (including price discounts), for a fixed period of time. These contracts offer more flexibility and potential savings, but may have exit fees if you switch providers during the contract term.
Different types of market contracts:
Once you’ve decided to compare market contracts, there are two main types of these to choose from, too.
- Variable Rate Plans: Under a variable rate plan, the cost per kilowatt-hour (kWh) of electricity can fluctuate over time based on national market price changes. This means that your electricity bills may vary depending on market conditions.
- Fixed Rate Plans: Fixed rate plans offer stability by providing a consistent electricity rate for a set period of time, typically ranging from one to three years. This type of plan protects you from price fluctuations during the fixed term.
By comparing different types of plans, you can make an informed decision and choose the energy plan that best suits your household's needs, usage patterns, and budget.
How do I know which type of electricity tariff is the best one for my home or business?
There are five basic electricity tariffs on offer. These are:
- Single rate tariff: the cost per kWh is the same regardless of when you’re using the electricity
- Time of use tariff: this tariff has different rates for different times of the day, such as peak, off-peak and shoulder periods. Peak periods are when electricity demand is highest, while off-peak periods are when demand is lowest.
- Controlled load tariff: designed for high-demand appliances, such as a hot water system, underfloor heating or a pool heater, and billed at a separate rate from standard electricity usage
- Demand tariff: this tariff is based on the highest amount of electricity you use during a specific period, regardless of the time of day
- Feed-in tariff: this is the amount you get paid or credited for the excess solar power your solar system generates and feeds back into the electricity grid
To determine the best type of electricity tariff for your house or business, think about the following factors:
Energy use pattern:
Think about your household’s energy consumption throughout the day. Are there usually people at home during the day using electricity? Or is most of your consumption at night, when people return home from work or study? If you use most of your electricity in the afternoons and evenings, during peak hours, a time-of-use tariff might be beneficial. However, if your consumption is consistent throughout the day, a single-rate tariff could be more suitable.
Solar Panels:
If your house or business has solar panels, a feed-in tariff is essential to sell excess electricity back to the grid. Compare feed-in tariffs from different providers to get the best return on your solar investment. Feed-in tariffs are measured in cents per kilowatt hour, c/kWh. Some retailers offer different c/kWh for blocks of electricity, so you get paid more for the first block you supply to the grid, but less for subsequent blocks. It is also common to have ceilings or limits on how much power you can feed back into the grid.
High-use appliances:
Do you have a swimming pool? Or underfloor heating, or a large hot water storage system? Such appliances consistently use a large block of power each day. If you do have high-energy-use appliances, it may be worth considering having them on a separate electricity meter with a controlled load tariff. These tariffs only supply power during off-peak times when demand is low (eg. often at night) but cost far less than standard tariffs, so they enable you to use your high-use appliance for a cheaper rate.
Peak demand tariff:
If you run a business which has a high energy demand for specific periods, a business energy plan with a demand tariff might be worth considering. It can help you manage costs if you can shift non-essential energy usage to off-peak times.
By considering all these different factors, and understanding your unique energy requirements, you can make an informed decision on the best electricity tariff for your house or business. Remember that the best tariff will vary based on your specific needs and circumstances, so take your time to research using Savvy’s free comparison service to choose the most suitable energy provider for your home or business.
How do I make the switch to a new electricity provider?
To switch electricity providers with Savvy, follow these steps:
- First, provide us with info: Share information about the type of plan you need and your current feed-in tariffs (if you have solar panels). Have your current electricity bill handy, as you'll need to provide usage and meter details.
- Compare offers: Savvy will present you with a range of electricity plans based on the preferences you've provided. You” be able to compare different plans available in your state.
- Select your plan: Once you find a new plan that suits your needs, select it and then follow the instructions for making the switch.
- Provide your details to the new supplier: If you decide to switch, your new energy provider will contact you to confirm the plan and arrange the contract. They will arrange the transfer on your behalf.
- Final meter reading: Your former supplier will conduct a final meter reading and issue their final bill. The switch typically takes two to three days, and you won't be without power during the changeover process.
After switching, it's essential to regularly review and compare energy providers to ensure you're always getting the best offer for your personal requirements.
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Disclaimer:
Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of energy plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys an energy plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.
Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an energy plan. For further information on the variety of energy plans compared by Econnex, or how their business works, you can visit their website.