How Do Energy Discounts Work?

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Updated 06/12/2023
What changed?
Refined and expanded types of discounts, included considerations for Energy Plan discounts
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Updated 06/12/2023

What changed?

Refined and expanded types of discounts, included considerations for Energy Plan discounts
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Edited by

Laura Crowden

Find out more about how we make money.

View our Privacy Policy.

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What are pay on time discounts?
What other discounts could Energy Providers offer?
Are there discounts for renewable energy options?
How can I save more with energy discounts?
Keep an eye on benefit periods
Factor in perks and other incentives
Don’t ignore rebates or concessions
Where can I compare Energy Plans and discounts?

What are pay on time discounts?

One discount you’re likely to see advertised is a pay on time discount. Overdue bills are a hassle for everyone, so this discount encourages you to pay bills before or on the due date. However, it’s a conditional discount. You won’t get it unless you pay each bill on time. The good news is that if you do forget and pay your bill late, you’ll still be eligible for the discount again on your next bill — as long as you remember to pay that one on time!

What other discounts could Energy Providers offer?

In addition to pay on time discounts, there are a wealth of other discount types out there, including:

  • Direct debit: A little like a pay on time discount, you might get a discount if you set up direct debit billing for your Energy Plan. It can be a win–win for you with the convenience of not needing to remember to pay your energy bills and getting a discount for it.
  • Bundling: Choosing an Energy Provider for multiple services, like electricity and gas, might get you a discount as thanks.
  • Paperless billing: You could save some trees and some cash with this discount. All you need to do is let your Energy Provider know you want your bills sent to you digitally through email or their app, rather than through the post.
  • Loyalty: Sticking with an Energy Provider and Energy Plan for a certain length of time could also land you a discount.
  • Membership: Your Energy Provider may have partners in other industries, like insurance. They may then offer you a discount if you can prove your membership with the partner.
  • Referral: Life is better when we’re together, and if you invite a friend or family member to sign up with your Energy Provider, you could get a one-off discount as a thank you.
  • Sign up: Some Energy Providers like to reward customers with a discount if they signed up to a plan online rather than in person or over the phone.

Are there discounts for renewable energy options?

Renewable Energy Plans may come with any of the above discounts. Alternatively, your Energy Provider might have their own special renewable energy discount.

What tends to get talked about more when it comes to renewable Energy Plans though is feed-in tariffs. This is the rate you’ll be paid for excess electricity that you export to the grid through your solar system. However, they’re not really a discount. Instead, they’re more like a credit.

How can I save more with energy discounts?

Discounts are made to be tempting, like the most decadent and moist chocolate cake (think what Bruce Bogtrotter from Matilda got to enjoy). But if you want to avoid a stomach-ache, you need to know what you’re doing.

Understand the conditions and what you’re capable of

Energy discounts can be a little different to the discounts you see at Woolies or Coles. Whereas a temporary reduction of the price on your favourite ‘I deserve a little treat’ iced coffee is unconditional, many energy discounts are conditional. Essentially, this means you need to do something to get the discount, otherwise it’s full price for you, bud.

For instance, a direct debit discount is usually ongoing (for a while at least) but requires you to pay your bills via direct debit. If for whatever reason there isn’t enough cash in your nominated account when the time comes for your Electricity Retailer to process your bill, then you’ll be stuck paying full price for that particular bill.

Sign-up discounts are one-off and the discount is done and dusted once you commit to the contract. So, before you go all in on a discount, make sure to check if you need to be upholding your end of the bargain.

Additionally, while you might tell yourself you’ll pay your bills on time, or you’ll always have enough money in your direct debit account, if you can’t keep to your promise, the discount will be meaningless. Taking a long hard look at yourself in the mirror and going over your past bill habits can help you understand which conditional discounts are better suited to you.

Know how to compare discounts

Comparing discounts is a little like doing sums with fractions where you need to get the denominators (the number on the bottom) to match before you can start doing anything.

In terms of discounts, you want to find some common ground for your discounted (conditional) price and your unconditional price. This could be a monthly, quarterly or annual bill, for instance. You can then see what the discount actually adds up to, as well as compare discounts between different plans.

Just don’t get caught out by how Energy Retailers apply their discounts. Some discounts may cover your total bill, while others may only be effective on a certain charge, like your usage.

As you go about comparing those discounts like a pro, it might be worthwhile to remember that the biggest discount may not always be the winner for you. Instead, a lower-priced plan even without discounts could work out better value in the long run or another plan may simply tick a few more boxes for you.

Now, if you happen to live anywhere the Electricity Retail Code applies, you’ll have a little extra help with all this maths. That’s because Electricity Retailers have to provide you with a comparison of how the unconditional price bears up against the Default Market Offer (DMO).1Australian Competition and Consumer Commission – Guide to the Electricity Retail Code, p15 From there, they also need to state, as a percentage of the DMO, how the conditional price compares.2As above, p26 That could mean you see a plan that is unconditionally 10% less than the DMO but if you pay on time every time you’ll get another 5% off.

While there’s a few different numbers to juggle here, it’s about helping you easily compare prices of different Electricity Plans from different providers, even if there’s discounts at play.3Energy.gov.au – Price safety net

Just bear in mind that the Electricity Retail Code is only in effect in NSW, South East Queensland and SA.4Australian Competition and Consumer Commission – About the Electricity Retail Code If you live anywhere else, you’ll likely need to do your own Electricity Plan discount maths and there’s no convenient DMO to line them up against either (unless you live in Victoria, in which case you can use the Victorian Default Offer). Unfortunately, too, there’s no equivalent requirement for gas pricing and discounts, no matter where you call home. But we believe in you and your calculator.

Keep an eye on benefit periods

Nothing lasts forever and that includes discounts. The term you need to look for in your Energy Plan is ‘benefit period’. This could be any kind of timeframe, from a few months to a few years. But once time is up, so is your discount.

You can approach benefit periods in two ways: enjoy them while they last and be prepared to pay the potentially higher bills once they’re gone, or make the most of the benefit period and then switch to another plan when the discount is over.

What you choose to do is up to you, but it can be worth knowing that your Energy Retailer has to give you a heads up when the benefit period is coming to a close. Technically, they actually have to tell you at least 20 business days out before the end date but no more than 40 business days before.5Energy Made Easy – Discounts and fees

This notice can be your sign to look over your plan and see if it’s worth staying on without the discount or if it’s time to switch. Alternatively, you may want to approach your Energy Retailer and negotiate a discount or extension of the benefit period.

Importantly, not every discount may come with a benefit period. Some may stick around as long as you’re on the plan or with the Energy Provider. But you won’t know unless you read the fine print or give your provider a call.

Factor in perks and other incentives

Discounts aren’t the only incentives Energy Retailers may offer. They might throw in things like cheap movie tickets, a subscription to a streaming service or a deal on gym membership. While these perks won’t really affect your energy bill, they could make a difference to your wallet, particularly if you’re already paying for these little luxuries.

Say you treat yourself to a movie every month or two. Add up the prices for tickets and popcorn, then multiply that for the entire year. What would the difference be if you got free movie tickets (and maybe started to sneak in your own popcorn too)? Potentially, you could be saving yourself a few pineapples or the odd hundred if you’re an iMax or 3D fan. In terms of your lifestyle, this perk might be worth more to you than a discount on your energy bill, and any money saved from your regular cinema trips could go into your energy budget.

Don’t ignore rebates or concessions

A discount from your retailer isn’t the only way you could get some fat chopped off your energy bill. Depending on your circumstances and where you live, you may be eligible for government rebates or concessions. These could be recurring credit, like the Family Energy Rebate, or a one-off payment, like the cost-of-living rebates distributed to Queenslanders in 2023.6Energy.gov.au – Energy bill relief for households – Queensland

While you can’t really shop around for concessions and rebates, if you’re eligible for them they can be worthwhile. You may even be able to combine them with discounts from your Energy Provider to reduce your bill further.

Where can I compare Energy Plans and discounts?

Finding a discounted Energy Plan that works for you can take time and effort. But who has plenty of those spare when there’s an endless to-do list at home, a work week full of meetings and the latest season of Stranger Things to catch up on?

Luckily, iSelect is here to help lighten the load. While we can’t pick your kids up from school or sub in on your Zoom call, we can make it easier for you to compare a range of Energy Plans.* Our convenient online comparison tool or our friendly team available to call on 13 19 20 can get you comparing plans in a matter of minutes.

Get started on comparing energy plans today!

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iSelect does not compare all energy providers or plans in the market. The availability of plans may change from time to time, depending on who iSelect’s providers are and what plans they make available to iSelect. Not all plans made available from iSelect providers may be compared by iSelect either due to commercial arrangements, area or availability, so not all plans or providers compared by iSelect will be available to all customers. Some plans and special offers are available only from iSelect’s contact centre or website. Energy plans are available only for properties located in eligible areas of Victoria, New South Wales, South East Queensland, South Australia and ACT. Click here to view iSelect’s range of providers.