How To Compare Electricity Rates
When comparing electricity rates, there are a few things you need to know. Fortunately, Billy Explores does most of the work for you, but we want you to understand how to compare electricity rates for yourself too. It makes a whole lot more sense when you can interpret some key things that you’ll see popping up in our electricity comparisons.
Understanding Energy Deregulation
The state in which you live will play a big part in what sort of deals you can get from your electricity provider. Deregulation means opening the industry up to full market competition, meaning you’ve got several energy providers in AU to choose from. States with a deregulated energy industry are Victoria, New South Wales, South Australia, Australian Capital Territory and parts of Queensland. This means providers are competing for your business and as such will offer a range of discounts and incentives to get you on board. Here is how to compare electricity rates in each deregulated State:
- Compare Electricity Rates in QLD
- Compare Electricity Rates in VIC
- Compare Electricity Rates in NSW
- Compare Electricity Rates in ACT
- Compare Electricity Rates in SA
States that are still regulated mean the government sets energy prices. That way everybody in the state pays the same for their power. Regulated states are Tasmania, the Northern Territory, Western Australia and parts of Queensland.
Know Your Current Bill
If you’re going to be shopping around for a better energy deal, the first thing you need to do is understand your current bill. Take a look at your most recent bill and work out what sort of rates you’re being charged for usage. This will show in kilowatts per hour (kWh). You can also look for other information like tariffs, supply charges and any discounts or fees. We’ll go into more detail on these further down the page, but if you need some help understanding your bill, check out this useful article on how do electricity bills work.
Learn more about your current providers’ electricity bill:
Contract Types
There are two types of contracts you can have with your energy provider.
- Standing contracts have the electricity rates set by the State or Territory government. With a standard contract, you’re not going to be eligible for a lot of the discounts a provider offers, but your electricity rates will remain constant. You’re also usually fairly safe from lock-in contracts and exit fees.
- Market contracts allow energy providers to set the rates themselves. You could compare this to a variable-rate home loan. You’re at the mercy of the market in some ways, however, you’re also going to benefit from a range of discounts offered by the providers. You will generally find the rates are also more competitive because the provider is fighting for your business. Be aware though, market contracts may have a lock-in contract period and you could be subject to exit fees for leaving early.
Tariffs
How you use electricity plays a big role in choosing which type of tariff is right for you. Most energy providers will give you the option of choosing two different types – Single Rate or Time of Use.
- Single rate tariffs charge the same kWh rate regardless of when you use it. There’s no peak or off-peak times to worry about with this. If you find that you use most of your power during peak times, a single rate tariff is probably your best option.
- Time of use tariffs allows your energy consumption to be measured in peak and off-peak periods. Electricity plans with a time of use tariff usually have lower rates for off-peak periods. Be warned though, tariffs are more costly during peak hours. If you use the bulk of your power after around 8pm, this tariff will save you some money.
Supply and Usage Charges
Supply charges are a fixed daily rate which remains the same every day. If you’re a small household or you just don’t use much power, choosing a lower supply charge and higher usage rate may benefit you.
Usage charges are the rate in kWh you’re charged for the energy you use. If you find your household uses a lot of power, look for plans that offer a lower usage rate, even if it means paying a bit more for the daily supply charge.
Discounts
With so much competition in the energy market, we’re seeing providers offer all sorts of discounts and innovative ways to give you the best value for money. Some of these discounts are:
- Usage charge discounts: You may only be entitled to these by paying your bill on time, so don’t be late with payment!
- Sign-up discounts: These are usually applied to your account for signing up online. Check the terms, as some may only apply for a contract term, whereas some could just be a straight discount on your first bill.
- Paperless bills: Many providers offer a discount if you choose to receive your bill online.
- Direct Debit discount: Pay by direct debit and receive a reduction in costs. Just make sure there’s always money in your account to avoid late fees.
When comparing electricity rates, we recommend looking at discounts as an added bonus rather than the main focus of your search. Long term savings are always better than temporary ones.
Fees and Charges
This is where the fine print comes in. Not a lot of providers are going to proudly advertise that you’ll be hit with fees if you leave your contract early, but the fact is many contracts have this condition. We strongly recommend asking your provider about any fees or charges which could be associated with your electricity contract.
Seek Professional Help
No, we don’t think you’re ready for a straight-jacket! By professional help, we, of course, mean Billy Explores. We take the leg work out of finding the best deal for your household, but it’s still important for you to have a basic understanding of how to compare electricity rates. All Billy needs is your postcode and he can get to work finding the cheapest electric and gas among our panel of retailers that suits your needs, so let us help you compare electricity rates today.
