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How To Find The Best Electricity Plan For You
There are many factors that determine the best electricity plans for you. What suits one person may not suit another. Some may value the most affordable price, while others value the freedom of a no lock-in contract. And others might be passionate about an electricity company with the highest green energy rating. Whatever your priorities, it’s simple to work out if you know what to look for.
Reviewing the topics below will help you determine which energy company provides the right electricity plan for you and your household.
Market vs Standing contracts: Have you shopped around for rebates and discounts?
If you haven’t switched electricity providers, you might be on a standing contract and may be paying more for your electricity than you need to. Standing contracts are government-regulated, meaning the electricity rates that you pay might be set by your State or Territory Government. They contain terms and conditions that can’t be changed by the retailer.
Market contracts, on the other hand, are drawn up by energy retailers in response to the highly competitive energy market. Market contracts can be less expensive because they offer discounts, rebates, sign-up incentives and competitive electricity rates. For example, there may be a discount when you pay bills by a due date.
The flipside is that market contracts will lock you in with the energy provider over a certain amount of time, and exit fees can be charged if you leave early, depending on which state you live in.
Not all market contracts are created equal. It’s a good idea to have a chat with an iSelect consultant to see what market contracts are available from different retailers in your State.
Fixed vs Variable Electricity Rates: Does one provide a better deal?
Just as with mortgages, you may stand to save money by choosing a fixed rate plan over a variable rate plan and this could help determine which are the best electricity plans for you.
Most electricity plans are variable rate plans. These plans allow the energy retailer to change electricity rates at any time. On the other hand, fixed rate plans give you the same agreed-upon rate throughout the fixed term of the contract – usually two years. A fee is usually charged if you leave this type of contract early, so you may want to consider whether you want to be locked into a contract.
You also need to make sure that the fixed rate on offer will be better than other types of discounted plans.
Ultimately, there’s no right or wrong answer to whether fixed or variable electricity rates are a better deal. You can’t predict which rate will end up more affordable by the end of the contract. Speak to an energy expert at iSelect to examine what the rates are like at the present.
Single rate vs Time of use tariffs: Which option suits you better?
Single rate and time of use tariffs are another variable in your contract that may determine if you’re on the best electricity plans. Single rate tariffs means there is no peak or off-peak period, just the same rate no matter the time of day.
On the other hand, time-of-use tariffs require the installation of a smart meter and charge different rates according to the time of day. Generally speaking, time-of-use tariffs classify different peak, shoulder and off-peak times. Thirdly there’s two rate tariffs. This is where the meter is able to charge at two prices: peak and off-peak.
Your usage patterns play a big role in whether single or time-of-use tariffs are right for you. If you largely use electricity outside of peak time, time-of-use tariffs could be a brilliant way to reduce the cost of your energy bill. You may even be willing to change your energy consumption habits enough to benefit from a time-of-use tariff. However, if you do use a lot of electricity during peak times, signing up for a time-of-use tariff could be a costly mistake.
Supply and Usage: How do they relate to your household size?
Supply charges don’t vary like usage charges. They are a locked-in daily rate. Usage charges change as households use more or less power.
It’s worth comparing the price of supply and usage charges from different providers and deciding what is best suited to your household. A small household benefits more from a competitive supply charge, as this will make up a substantial percentage of their overall bill. The larger a household gets, the more important it is to look for competitive usage rates, as more family members use more energy on a daily basis.
Contracts: Are you willing to lock in?
A market contract or a fixed rate plan will probably dictate the amount of time you are contracted to the energy provider. These are often one, two or three-year terms. If you’re in a rental situation, and you’re likely to move, or if you own a house and you’re planning to sell, a fixed-term contract may not offer the best electricity plans for you.
If signing up to the same company for a set period of time is a concern for you, make sure to check your contract for an exit fee.
Green rating: How environmentally conscious are different companies?
With growing concerns about climate change, you may choose to do some in-depth research on which energy retailers are the most environmentally responsible. Choosing an energy company with clean and green initiatives could be an influential factor that helps to rank best electricity plans for you.
There are many factors that might determine which are the best electricity plans for you and your family. Whether your prioritise discounts and savings, or you want find a plan that’s structured in a way that’s affordable for your lifestyle, iSelect can help.
iSelect does not compare all products in the market. Not all products are available at all times or in all States.