Energy bill getting out of hand?
Here's why and how you can fix it and save all year around.
My colleague was paying a bit too much for energy...
$500 a year too much...
Madeleine Burke had been with the same provider for the last 6 years.
And while she was paying a good price at first, her bills suddenly "ballooned up by around 40%" a few years ago.
And with this year's COVID-19 restrictions forcing Maddie to spend more time at home, her rising bill was no longer something she could ignore.
A lot of plans have what is called a 'benefit period'.
This means you get a discount for a certain period of time (usually 12 months), after which the price suddenly changes and has you scratching your head like Maddie was.
So back to the $500.
That's how much Maddie was able to save per year once she compared & switched to a cheaper plan.
Her original bill was $564 over 90 days.
The price on a new plan that she was able to find by comparing on Finder was $439.
$564 - $439 = $125 savings per bill.
In a year that's $500.
|Estimated bill from new provider||$439||$1,756|
And the best part?
It only took her a few minutes to sign up and make the switch. Then it was completely hands off as her new provider handled everything.
Don't be like Maddie: Understand what your bill means
Australians like Maddie may just not know how to read their energy bill to figure out if they are paying too much.
In fact as I was writing this, Taylor, another colleague of mine informed me that their bill recently went from around $140-160 a month to $458.
According to Finder's Consumer Sentiment Tracker, a nationally representative study of over 5,000 respondents, 5.1 million Australians (29%) have little to no understanding of their electricity bill.
One in three Australians (34%) have no idea what their electricity usage is or where they can find it on their bill.
This means that even if someone wants to compare their plan to the other options out there, they might not even know where to start.
When looking at your energy bill, take note of features like:
- Your energy usage
- The total cost
- The bill period
Beware of "setting and forgetting"
As was the case with Maddie, she took the deal she received from her original provider and forgot that the deal would expire at the end of the 12 month benefit period.
Check your energy plan's contract type when you sign up and take note.
If your plan has a 12 month benefit period, consider comparing and switching after that period of time.
At the end of the day, make sure you understand what plan you are on. If your rates have gone up, be sure to compare and switch if you have to.
Use your energy wisely, either by doing things during off-peak periods or investing in energy-efficient appliances.
Quickly compare rates from Australia energy providers
Here are some deals from retailers on our database that include either a link to the retailers website for more information or to a form from an energy broker to enquire for more information. Prices are based on a residential customer in Melbourne, Victoria (Postcode: 3000) who consumes 4,000 kWh a year on a single rate tariff in the CitiPower network. We show one plan per provider and the estimated price includes conditional discounts (if any). Any plans with special eligibility requirements are excluded from this list. Your actual bill may vary, depending on your usage. Always check the provider's site before applying.
Here are some deals from retailers on our database that include either a link to the retailers website for more information or to a form from an energy broker to enquire for more information. Prices are based on a residential customer in Brisbane (Postcode: 4000) who consumes 4,600 kWh a year on a single rate tariff in the Energex network. We show one plan per provider and the estimated price includes conditional discounts (if any). Any plans with special eligibility requirements are excluded from this list. Your actual bill may vary, depending on your usage. Always check the provider's site before applying.
Here are some deals from retailers on our database that include either a link to the retailers website for more information or to a form from an energy broker to enquire for more information. Prices are based on a residential customer in Adelaide, South Australia (Postcode: 5000) who consumes 4,000 kWh a year on a single rate tariff in the SA Power Network. We show one plan per provider and the estimated price includes conditional discounts (if any). Any plans with special eligibility requirements are excluded from this list. Your actual bill may vary, depending on your usage. Always check the provider's site before applying.
Smarter energy usage during COVID-19
Aside from making sure you're on a better value plan, there are a few things you can do to ensure you save on energy during the COVID-19 pandemic.
If you are on a "time of use plan" – as in, your provider charges you more during peak periods and less during off-peak periods – plan your energy use around this.
For example, do your washing early in the morning or late at night (off-peak) if possible, or at the very least, avoid doing it during the evening.
As an example, here are the off-peak hours for customers in the Ausgrid region (winter):
|Peak period||5pm to 9pm||Most expensive|
|Shoulder period||7am to 5pm||In between|
|Off-peak period||9pm to 7am||Least expensive|
- Find your energy hotspots. Can you limit your biggest power drainers? Check your heating and cooling appliances, as they usually use the most power.
- Use energy-efficient appliances. If you can afford the upfront cost, consider installing more energy-efficient appliances so that you save more in the long run.
The first step to managing your energy bill is to understand where the costs are coming from, so you can start working to reduce them. Here are some of the main factors that affect your bill:
- Your home's design. How big it is and what features it has (gas or electric heating, central heating, etc.) will affect your energy consumption.
- Energy efficiency of devices. Appliances can be power-hungry beasts, depending on what you have.
- Your lifestyle. The times that you're home as well as what appliances you use and when can have a big effect on your energy bill.
- Energy provider. Your choice of energy retailer and the contract you sign affect how much you pay.
The number you see printed on your electricity bill is actually composed of a few different costs added together. There are three contributors:
- Supply charges. These are the daily fees you pay for being hooked up to the grid, regardless of whether you're using any power. Your consumption doesn't affect these.
- Usage charges. These are a direct result of how and when you consume electricity. Your choice of retailer and the contract you sign will determine how these operate at different times of the day and week.
- Network costs. These are the costs distributed among all consumers to pay for upgrading and maintaining new and existing power infrastructure.
Changes that you make to your own energy consumption will only affect variable rates. However, if households as a whole were to use less energy, network costs would drop since there would be less need for upgrades to support higher peak demand.
Do these charges stay the same?
Your bill could get more expensive over time. This means your rates have either gone up or they weren't that great to begin with. It's a good idea to compare often and consider making a switch.
Implementing just a few energy-saving measures can save a family hundreds of dollars off their bills each year. For example, switching off a games console when not in use could save up to $1931 a year, while installing a super-efficient showerhead could not only save $3151 in water bills but a bunch of electricity too by not having to heat excess water. Small changes add up.
Three steps to save
So how can you save? Here are three steps to starting your energy saving journey.
- Research. Understand what's driving up the price of electricity, and how your house and lifestyle affect your own bill. This guide can help with your research.
- Investigate and organise. Investigate your household's energy use to understand the biggest contributors to your electricity bill. Search around your house to find energy "hotspots" — devices that are consuming large amounts of power.
- Compare. Make sure to shop between different electricity and gas providers in your area for the best deal. Sign a contract with a variable rate that suits your lifestyle and power-usage patterns. Consider whether installing smart meters on some appliances would help or whether you should purchase more energy-efficient devices than you have now.
You often don't need to settle for what the energy company is offering; there are ways to negotiate a better energy contract.
5 steps to help you negotiate
Here's some tips to ensure you get a good deal:
- Shop around. Searching online is a great way to develop a good understanding of the market. That way, you can easily compare energy provider prices side by side and you know you're not paying more than you should.
- Pay attention to the fine print. Look out for details on pricing and offers like pay on time discounts. Also keep an eye out for clauses like a 'take-or-pay' clause. This means you'll still have to pay even if you use less than the minimum amount of energy.
- Contract period. The best contract period depends on the market. For instance, if current prices are more expensive than future prices, then a shorter contract makes more sense. Alternatively, a longer contract could help you save if you will struggle to buy cheaper energy in the future.
- Know how much data you use. If you can give the energy provider at least 12 months of information on your energy usage for each half-hour period, they are unlikely to charge you a premium. You should be able to get this data from your current energy supplier.
- Plan ahead. It's good to know whether you will make any major changes in the future. Whether you plan to move house or expand your business, a longer contract is probably only worth it if you have a good idea of what lies ahead.
As long as you don't live in Tasmania, the Northern Territory, Western Australia or outside of south-east Queensland, you will have a choice of energy retailers. Even if you can't pick between providers, you'll have a choice of contracts with different types of rates.
You can use Finder's online energy comparison tool to help you find the providers and plans best suited for you, wherever you live. Remember to be careful when choosing a contract — if it doesn't match your lifestyle and needs, you could end up paying more than you would otherwise.
Finally, you can shorten your billing cycle to pay monthly. This won't drive down costs, but it can help you avoid large tri-monthly shock bills and help you budget more effectively.
Once you have a basic picture of your energy consumption, including when and how you use the most energy, you can go deeper into managing it:
- Compare patterns of use. Using your energy bills, figure out how your energy consumption has changed with the seasons and how your energy use this year compares to the last. If you're using more than you used to, or use more in summer or winter, figure out why.
- Consider time of use. Do you stay at home during the day and go out at night? Are you part of a family that arrives home together and switches everything from the computer to the lights on? Knowing this should help you pick the right type of energy contract. Additionally, switching appliance use to off-peak periods (like running your wash late at night) can help lower costs.
- Find energy hotspots. Usually, the biggest guzzlers of power in your house will be heating and cooling, followed by standby power, lighting and cooking. Make sure the appliances you use to heat and cool your house are installed correctly and well-maintained, and see if you can get them to run more efficiently with small changes.
- Use energy-efficient appliances. Appliances make up about 30% of electricity bills. Cheaper appliances may cost you more in the long run with the energy they chew through. Don't buy big appliances with features you won't use, and go for ones with the highest energy star rating. Finally, make sure you install and maintain them properly — don't place your fridge next to a hot oven, for example.
- Take simple action. There are many little things you can do to save. If you get cold in winter, you may want to invest in thicker sheets instead of turning on a heater or buy a more efficient heater if possible. Blocking holes in your house can also save on heating costs.
Standby power is the electricity that's consumed by your appliances that aren't being used or when they are on 'standby'.
How badly does standby power impact energy use?
Standby power accounts for as much as 10% of overall household electricity usage and while most appliances only draw a small amount of energy on standby, the costs add up. Your digital home appliances alone could be costing you as much as $171.27 a year. Luckily, reducing your bill is as easy as flicking a switch.
Bonus tip: What do I turn off?
Power's most expensive when everyone else is using it, usually from 7am-10pm daily. Here are two ways to profit off consuming power when no one else is:
- Off-peak water heater. Since heating water consumes about 25% of a household's electricity, installing a system which only heats water during off-peak periods and then stores it for use can really cut your bills. Check if this is available with your retailer and water heater.
- Time-of-use plans. This type of energy tariff charges you less for energy during off-peak periods. So long as you have a smart meter involved and your household consumption patterns support it, this might help you save.
The network costs mentioned above are the main reason energy prices have continued to rise in the past decade or so. There are constant upgrades being made to Australia's power infrastructure, such as replacing and repairing old poles and wires as well as increasing network capacity for a growing population and rising peak energy demands. As these operations continue and expand, electricity bills grow to match them.
Save energy around the home
- Insulate everywhere
- Update your light globes
- Use fans instead of air conditioning
Save energy in the kitchen
- Microwaves use less energy than your oven
- Cook food with a lid on for faster cooking
- Keep the oven door shut as much as possible
Save energy in the bathroom
- Short showers over baths
- Fix the dripping taps
- Insulate copper pipes
Save energy in the laundry
- Use the cold wash
- Get a front loader washing machine
- Hang your washing on a clothesline instead of the dryer
Save energy outdoors
- Solar power is your friend
- Motion sensors for outdoor lights
- use timers for pool filters
Save energy with your PC
- Adjust the screen's brightness
- Get a powerboard that powers off accessories when your PC is off
- Shut down at the end of the day
Save energy at work
- Your office culture will play a big part in saving energy at work
- Laptops are more energy efficient than desktops
- Make sure you switch off the lights at the end of the day
Lower your household bills
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