Why is my electricity bill so expensive? (Updated 2021)

Why my electricity bill so expensive?

Electricity prices are actually falling, so why is the cost of your energy bill going up?

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Energy prices have dropped for Australians across the board since 2018, with the median price falling 4.4 per cent for residential customers. This is according to a report by the Australian Competition and Consumer Commission (ACCC), which found it to be a sign that recent energy regulations were doing their job and protecting customers.

However, you may have noticed that even with prices supposedly falling, your recent bills have still been going up a lot.

This is probably due to a few different reasons.

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Reason #1: Time at home since the pandemic

2020 has been an unprecedented year in a lot of ways, and restrictions introduced by the government to control the spread of COVID-19 have drastically changed people's behaviour. Greatly increased time spent at home has raised home power bills and lowered business usage, based on another report by the ACCC. The report cites:

Victorian households have generally consumed between 10 and 30 per cent more electricity during April and May than last year

Electricity patterns during lockdown

Image taken from the Inquiry into the National Electricity Market—September 2020 supplementary report

How much does working from increase energy bills?

Reason #2: Winter heater usage

With heating already making up about 40% of your bill, more time at home during winter means more money spent.

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Finder's research found that customers use around 1.7 kW per hour in winter on a basic panel heater.

This results in roughly an additional $182.13 in electricity costs, in comparison to a standard springtime or autumn energy bill.

Heater typeAverage hourly usage (kW/h)Hourly running costWinter running cost (4 hours per day)
Electric blanket0.12$0.04$12.96
Oil-filled column heater1.6$0.47$167.40
Panel heater1.7$0.51$182.13
Fan heater1.9$0.56$202.50
Tower heater2.0$0.59$213.60
Convection heater2.1$0.63$226.80
Reverse cycle air conditioner3.5$1.04$373.09
Radiant bar heater3.8$1.14$410.40

We assumed an average daily use of 4 hours.

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Reason #3: Summer aircon usage

Aircon usageAdded cost to energy bill
No aircon for summer$0
Aircon usage at 20 degrees$250
Aircon usage at 22 degrees$200

Using Finder's aircon calculator we found that the cost of using a 5KW air-conditioner at 20 degrees over summer was around $250. This could mean an additional $250 to your normal bill in Spring or Autumn.

Of course, it's likely you would need to turn your aircon on in summer but that doesn't mean you can't save. In the same scenario, if we turn up the temperature by two degrees, we found a potential saving of $50.

When using the aircon calculator we answered with the following settings. Figures may change at any time in the future.

  • NSW
  • Temperature set at 20 degrees.
  • 4 hours a day
  • 7 days a week
  • 3 months of usage
  • 30 degrees average temperature

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Reason #4: Staying with the same energy provider

Staying with the same energy plan actually increases your energy bill. It's possible that:

  • Your plan's discount has expired
  • The plan you bought ages ago just isn't as competitive as it used to be
  • Its rates have gone up

In this example below, we look at two market offers by AGL and Origin, and what could happen to your rates after a year.

PlanAGL Residential SaverOrigin Go
Usage rates when you purchase (NSW)24.63 cents per kW/h24.13 cents per kW/h
What happens after 12 monthsPlaced on a "standing offer"May be placed on a new energy plan unless you have told them not to
Price on standing offer / new plan28.95 cents per kW/h29.43 cents per kW/h
Difference4.32 cents5.30 cents
Daily difference on 14.3 kWh/day usage61.776 cents75.79 cents
Annual difference for usage$225.48$276.63

This example is for illustrative purposes only. Your bill may differ based on your own usage and plan details.

Comparing plans and switching can help you save in the long term and drive down how much you're paying for power.

Image: Getty

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