Comparing electricity providers is underrated. If you care about saving money, the cost of electricity is likely one of your biggest household utility expenses – yet we rarely opt to switch for a better deal. There is likely $100s (if not $1000’s) of dollars being left on the table through the ‘lazy tax’ (aka consumers not bothering to hunt down a better deal).
Recently I was subject to ‘bill shock’ whereby I received my quarterly electricity bill, only to discover that I owed nearly $1,753 (compared to my usual $400). The reason for the increase was twofold;
- I underestimated how expensive running my heating was.
- My electricity provider increased their rates and I’d never compared them to other providers
Problem #1 is something within my control, but slightly difficult to reduce. Our family have very different ideas of what being warm means (and in turn, the desire to use the heating) and I wish to stay happily married, thus the best I can do here is aim to reduce the running temperature slightly and begin saving for a more energy efficient air conditioning unit into the future.
Problem #2 is once again within my control and something I was able to act upon immediately. Upon comparing my provider and plan, I realised I was on a very uncompetitive electricity plan. Through switching electricity providers, I was able to reduce my bill by 40% the following quarter – a saving of $680.
The golden rules of comparing electricity plans
#1 It’s up to you to find the best deal
No one is going to do this for you. If you want to save money, it’s on you to compare electricity plans. To compare electricity plans, you must first be well rehearsed in point #2 below.
#2 Electricity bills are not easy to understand. Take time to learn what they mean.
Electricity usage charges are confusing and use lots of acronyms. Take the time to learn what your electricity bill says about your usage and the rates you pay. The Australian Energy Regulator does a great job helping you understand what should be provided on your bill and why.
#3 Prices vary greatly amongst providers with absolutely no point of difference
Each electricity provider’s charges different rates, yet electricity is electricity – there is no such thing as one provider offering better electricity. This means you only need to compare electricity plans on one thing; the cost.
#4 Introductory offers are great but assess ongoing rates – not upfront incentives
When comparing electricity plans, assess two primary things; the cost per KHW and the daily supply charge. Combining these two costs, will give you a good understanding of which providers offer the best value for money.
#5 Use an electricity comparison website to make switching less painful
When I compared electricity plans, I did so manually by visiting numerous websites. It took me the better part of a full day to assess different plans and providers (incl. a full-blown mental breakdown trying to calculate costs in Microsoft Excel).
It may sound self-explanatory, though use a comparison website to help take the pain out of comparing electricity plans. It will save you time, frustration and help you arrive at the best possible deal for your personal circumstances.
How to compare electricity plans online
CompareBear makes comparing electricity plans simple. Instead of just listings 100’s of electricity companies in a table, CompareBear asks you a few simple (yet highly relevant) questions to understand your situation better. Using your responses, CompareBear tailors its search results directly to your situation – helping you see the most relevant electricity plans to your circumstances.
The team at CompareBear also look to broker unique deals for customers looking to switch; items such as cash back on sign up. So while I don’t suggest choosing a provider simply on their sign up offer, it is a fantastic added bonus to get rewarded for your switch.
How does CompareBear help you compare electricity plans
Per the above, CompareBear asks a few simple questions to help you compare electricity providers. They ask questions such as:
Do you have your power bill on you? Yes/No
- This is to extract some key details from your bills, such as your KWH and usage rates. If you don’t have a bill with you, never fear; you can still keep going.
Do you have a pool? Yes/No
- This helps CompareBear understand whether you may or may not be eligible for special types of electricity, often known as ‘Controlled Load’ that is designed for standalone equipment like pools and hot water heaters.
Do you have underfloor heating? Yes/No
- Per the above.
Do you use mains gas? Yes/No
- This is to see if you are eligible for bundled discounts with electricity and gas into one provider.
How many people live in your house? 1,2,3,4,5+
- This helps to understand your estimated energy usage.
What is your home address?
- This defines which energy providers are able to connect to your address.
How to get the most out of CompareBear?
Have your most recent bill with you. While it’s not mandatory, it’s a super easy way to immediately know your actual usage and charges.
Know your KWH rate of existing provider. This will be outlined on your bill or easily retrieved from your existing electricity provider. This is the key metric you will be comparing to assess value for money.
Know your daily supply charge (flat fee per day). This will be outlined on your bill, or alternatively easily retrieved via live chat with your existing electricity provider.
Know your KWH/connection rate after discount. Calculate your KWH + supply charge after GST, to see exactly what you pay. To calculate your total, add the charges together and add 10%.
Know your energy usage behaviour. Try and assess when you use the most energy and which devices are the least energy efficient. This will help you know how to save money by reducing your usage along with acquiring a new electricity plan that perhaps gives you cheaper electricity at certain times of the day.