Keeping it stable: How fixed rates can help lower energy bills in Tasmania in 2023
A fixed rate energy plan can be a great way to lock in your costs and save some cash.
In a time where the cost of living is a real concern, many Australians are considering fixed-rate energy plans.
The idea of keeping bills low is attractive in its own right – but there are a few other potential benefits too.
So today, we're going to take a look at some of the reasons why you might choose to opt for a fixed rate.
Certainty around pricing for the fixed period
Fixed rate energy plans allow you to lock in a specific price for the lifespan of your energy plan. Even if the wider market prices rise, you won't be charged more.
Now, the benefits of this are pretty straightforward – having a fixed rate in place means that you won't suddenly be blown away by bill shock.
To point to an example, Aurora Energy is only able to raise its prices once per year – on July 1 – as it's a regulated company.
In turn, this can make it easier to manage other aspects of the household finances. Budgeting, saving, and handling cash day-to-day can be significantly easier when you have a clearer picture of what your bill expenses are likely to be.
You can swap plans easily if necessary
Long-term lock-in energy plans are more or less going the way of the dodo these days.
But they're not completely gone yet either. So before you sign in at a fixed rate, it's worth looking at what sort of flexibility you have too.
If you can, you're able to gain the benefits of protecting your pricing – and in turn your other financial arrangements – while also being able to easily switch if necessary.
This way, you can be sure that you're locking in a great rate, without needing to commit to it forever if a better deal pops up.
For instance, Aurora Energy allows you to switch between plans for a small fee.
If you're on the Time of Use plan, the Aurora team is able to analyse usage to see which plans you would spend less money on. They're then able to help you swap quickly and with lower fees.
It's compatible with solar power
Solar power isn't as popular in Tasmania as it is in other parts of Australia, due to our cloudier weather.
However, data from the Clean Energy Regulator indicates that there have been more than 50,000 solar systems installed in Tasmania since 2002.
So if you're got solar panels installed on your home, you can still use them in conjunction with a fixed pricing model.
This way you can generate your own energy – either to save on your energy use, or to save on your bill by feeding back into the wider grid for a tariff.
It's an opportunity to rethink your energy use
One of the big reasons people tend to sign up is because their energy needs fluctuate quite a bit throughout the year.
Just think about those cold Tassie winters, and it's easy to see why many people have periodic spikes in their bill!
But signing up for fixed rates can also be an opportunity for ways to rethink how you use energy in your everyday life.
This way, if you eventually end up switching providers or back to variable, you can develop better usage habits that help you control costs.
Whether you're thinking of the big picture by investing in more energy-efficient appliances, or smaller habitual changes – like switching off the light switch when you leave the room – it all adds up over time.
It's easy to take a set-and-forget approach
Now, we should note that variable energy rates can sometimes be a bit cheaper than fixed.
Variable rates will fluctuate with the wider energy market, which means the price will go up and over time.
However, this means you can also potentially pay quite a bit more – unless you switch plans when you're informed of a price increase.
By contrast, for the term of a fixed rate contract, you're able to just set-and-forget. You know what you'll be paying, so you don't need to stress about a big boom in price out of the blue!