Essential guide to comparing electricity - WATTever

Essential guide to comparing electricity

Essential Guide to Comparing Electricity

The right electricity plan can save you hundreds of dollars. Here’s our essential guide to getting the best electricity deal with tips to avoid the pitfalls. There are some serious catches that sting a lot of people – that you’ll want to know about when you compare electricity offers.

Most Australians can now buy their electricity from a wide range of energy providers. In many locations, they can choose from up to two dozen retailers and more than seventy electricity plans. For the average household, the difference the between the cheapest and most expensive plan can be more than a thousand dollars a year. Even if you are on the ‘median’ standing offer, by switching to the lowest market offer the Australian Energy Market Commission (AEMC) calculated that big savings were available in their June 2018 Review.

The AEMC found that average electricity users in this situation, would save $504 in Queensland, between $365-$411 in NSW, $574-$652 in Victoria and an enormous $832 in South Australia. In the ACT switchers would save $273. So, you definitely want to get it right.

There is no one-size-fits-all best electricity plan because plans vary by region and have been designed to suit electricity users with different needs. Retailers have cheaper ‘market’ offers to attract new customers and more expensive ‘standing offers’ for existing customers. As a result, if you don’t regularly shop around for the best deal by comparing electricity properly, you’re likely to be significantly overpaying for power.

Keep the following tips in mind and you’ll be on track to finding the best deal for you. Our comprehensive comparison gives you the power to compare thoroughly and rank what’s most important to you.

What to watch for when shopping for a better electricity deal

1. Know how much electricity you use. The amount of much electricity you use and when you use it can impact what plan is best. Entering the usage information from your bill provides the most accurate results.

2. Compare the whole market. Why look at a handful of options when it’s now easy to compare thoroughly?

3. Look beyond the big discount – only focus on the cost. Ignore the distracting discount and look only at the cost. You want the cheapest plan, not the biggest discount.

4. Check the benefit period and discount conditions. Know if the plan has a discount period that will expire after a year or two. You will need to renegotiate or shop around – otherwise you’ll be overpaying when the discount disappears. Plans with Ongoing discounts are good options if you don’t want to keep chasing deals.

5. Understand pay on-time conditions. Consider whether you can make the payment conditions for on-time discounts. If you are ever a day late paying a bill your discount could disappear.

6. Know the fine print on limits. Many plans have limits. See the Retailers Price Fact Sheet for each plan so you can review all the details.

7. Have an exit strategy. Some plans still come with a fee for leaving. You’ll want to know this upfront!

8. Make sure your solar is valued. If your solar export isn’t included in the calculation then you won’t be able to work out the best plan. Also be wary of just looking at big feed-in tariffs because these plans have higher usage and supply costs. Compare the total cost when you add up supply charges, usage costs and take away any solar feed-in tariffs you’ll earn on your solar exports. You can read more about how to find the best electricity deal for solar.

9. Include any concessions. Different concession schemes operate in each state. You will find some retailers deduct your concession first then apply the plan’s discount to what’s left. How the discount is applied can really reduce what you might save.

10. Explore Green options. If it’s important to you it’s easy to review options including Green Power or Carbon Offset plans.

If you’re serious about finding a good deal you may want to read a little more about each tip.

1. Know how much electricity you use.

Your energy profileIt’s important to understand how much energy you use (measured in kWh) and when you use it. Because plans are designed for different types of users, using your own unique user profile helps provide the most accurate result from a comparison. A recent electricity bill will include the information you need to compare properly including details of your tariff type (anytime or time of use), the quantity of electricity used over a period of time (kWh), plus other factors such as solar export and concessions. If this information isn’t valued in the comparison or you don’t enter it, then the results could be less than ideal.

2. Compare the WHOLE market.

/Comparing electricity thoroughlyIf you want the best deal why would you only compare a handful of plans? There are up to 25 retailers in some networks actively competing for business with as many as 80 publicly listed plans to choose from. It’s now easy to compare thoroughly and see all your options. The high referral fees the big comparison services charge exclude many good retailers and can exclude the cheapest plans because retailers can’t afford to offer their very lowest prices AND pay hundreds of dollars in commission on the same plan.

3. Look past the big discount – only focus on the cost.

Electricity DiscountsA very common sales tactic is for retailers to make up big discount numbers so their offers seem impressive. Because there is no set price for electricity the discount number can be as big as they like. Ignore the distracting discount and look only at the final cost. That’s why we rank strictly by final cost and never by the discount. You can read our article on Why you should discount big discounts.

4. Check the benefit period and discount conditions.

Check the electricity plan discounts conditionsThe plans that appear at the top of a comparison ranking often include big discounts that are short term. At the end of the benefit period, which is usually 12 months, the Retailer can remove or reduce the discount on the plan. So that awesome deal can soon fall short. Just before the benefit period expires you’ll need to contact the retailer and ask them to reinstate your offer – and you’ll want to have researched the market to know that their response is still competitive. If you don’t, you’ll be paying a whole lot more. If you know that you might not chase a new deal every year you should consider plans with ‘ongoing benefit’ periods so you can avoid the expiring discount merry-go-round. To rank retailers whose discount benefit period doesn’t disappear, select only ‘Ongoing’ on WATTever’s comparison.
Also, check whether discounts will be applied before or after rebates and concessions – it’s surprising the difference this can make.

5. Understand the pay on-time conditions.

Pay on time discountsThink about whether you can make the payment conditions for on-time discounts. You could pay 20%-30% more than you’d been figuring, just because you made payment a day after it was due and lost the discount. So, it’s worth considering if meeting conditional discounts might be a problem. There’s plenty of good plans in the market that won’t take away your discounts if you’re ever a day late. WATTever’s comparison allows you select plan options that don’t remove discounts for late payment.

6. Know the fine print on limits.

Read the fine printMany plans come with limits. Some plans are only available to people who bought a solar system from the retailer, or limit your solar system size or have feed-in tariffs that get smaller after a period of time or when your solar export hits a certain level. WATTever includes links to the Retailers Price Fact Sheet for each plan so you can easily review all the details.

7. Have an exit strategy.

Exit FeesIt’s less common, but some plans still come with a fee for leaving. You’ll want to know this upfront! Check the Price Fact Sheet for details. If your current plan comes with an exit fee, then you’ll want to factor this in when deciding if it’s worth switching for a small saving.

8. Make sure your solar is valued.

Value solar feed-in tariffsIt’s important that the value of what you generate through solar is included in the comparison. If it’s not included in the calculation then you won’t be able to accurately determine which plan is best for you. Very few comparison sites value solar. EnergyMadeEasy doesn’t. The retailers know this and some engage in pricing tactics to get attention, including generous feed-in tariffs that are capped at very low levels, or have short benefit periods, or inflating usage and supply rates just because it’s a ‘solar plan’. We explain in our blog post, “Is the biggest feed-in tariff the best?“, the risks of blinded by the brightest feed-in tariff. The only thing that matters is the total cost when you add up the supply charges, usage costs and subtract any solar feed-in tariff you’ll earn on your solar export. If you’re looking to maximise your solar savings with the right plan, our guide on how to find the best electricity deal for solar covers the key things to look out for.

Don’t have solar and are curious to see how it might impact your energy costs? When you complete a comparison at WATTever simply move the Add Solar slider to see your estimated savings calculated if you add solar or more PV panels.

9. Include any concessions.

Electricity ConcessionsDifferent concession schemes operate in each state. If you have a concession that entitles you to reduced costs on your electricity you might think that every retailer treats them the same. They don’t. You will find some retailers deduct your concession first then apply the plan’s discount to what’s left. The more generous will apply the plan discount first to the total cost, then deduct your concession. It can make a real difference where discount rates are large. WATTever supports concessions and estimates costs based on each retailer’s approach, ensuring you get a proper picture of which plans are best for you.

10. Explore Green options.

Green EnergyKermit was wrong. It’s easy to review green options if that’s important to you. WATTever’s comparison includes the Green Electricity Guide star ratings – an independent ranking of Australia’s electricity retailers put together by The Total Environment Centre and Greenpeace. You can see the rating for each Retailer by hovering over the information icon for each plan. Plus WATTever’s comparison also allows you to Select Green Power or Carbon Offset, to only show plans that offer this.

You’re ready to save

Knowing what to watch out for and considering these things when you compare electricity plans will ensure there are no nasty surprises in your new bill. You’re now armed with the knowledge you need to find the plan that’s best for you – that’s the cheapest plan that you can meet all the conditions for and keep on top of any changes in the benefit period. Often the top-ranked plans won’t be cheap for you long. You’ll need to actively contact the retailer after the discount period expires in order to stay on a cheap plan. If you know you won’t be reviewing the market frequently, a better option is to choose retailers who offer plans with ongoing benefit periods. These can provide you better savings over the long term if you’re not a seriously committed deal chaser.

What’s next?

Piggy bank with gold coinsIt’s great to save a couple of hundred dollars or more by finding the right deal. If you’ve come this far you might like to consider further opportunities to make bigger savings – which can literally add up to thousands a year. Here’s how WATTever’s founder David, gets his families energy bills to less than $500 a year – for everything – air conditioning, cooking, transport. The lot.
Whether you update your lighting to LED’s, add some solar, monitor your energy use, get a heat pump for your hot water or go all the way to owning an EV there are lots of things you can do. WATTever is all about sharing how to be more energy efficient without compromising your lifestyle. It’s good for the planet. Equally good for your wallet. So come with us on the journey to save energy.

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