Canstar Blue looks at average fixed and variable electricity rates in New South Wales, Victoria, South East Queensland and South Australia to determine whether or not fixing your electricity rates could be a good financial move. This article will compare fixed and variable electricity plans and how they might impact your budget.
On this page, you’ll find:
- Is electricity a fixed cost?
- What is a fixed rate electricity plan?
- What is a variable rate electricity plan?
- Fixed vs variable electricity rates New South Wales
- Fixed vs variable electricity rates Victoria
- Fixed vs variable electricity rates South East Queensland
- Fixed vs variable electricity rates South Australia
- Fixed or variable: Which type of electricity plan is better?
- Compare electricity plans
Is electricity a fixed cost?
Picking an electricity plan is quite similar to picking a home loan, in the sense that they can offer fixed or variable rates – for electricity, this applies to usage and supply rates, rather than interest charged.
Although some providers offer the option to fix electricity rates, more often than not electricity is not a fixed cost. The majority of electricity plans in the market come with variable usage rates, but there are still a handful of electricity retailers that offer the security of a fixed rate electricity plan.
What is a fixed rate electricity plan?
A fixed electricity rate plan is an agreement whereby your electricity provider will not change the rates it charges you for power over a set period of time, usually one or two years. By guaranteeing today’s rates on electricity for one or two years, customers are protected from any electricity price changes and may find it easier to budget ahead.
Unlike most other market offers, fixed rate contracts generally don’t include conditional discounts for paying bills on time, or via direct debit (although there are exceptions). Though there are over 30 electricity retailers in Australia, only a handful offer fixed rate electricity deals, and some may not be available in all areas.
Fixed rate electricity plans are not to be confused with fixed cost energy plans, whereby customers pay the same amount every billing period.
What is a variable rate electricity plan?
Variable rate plans are the standard type of energy deal and are offered by almost all retailers. On a variable rate plan, the electricity company is free to change the usage and supply rates it charges you at any time, provided it gives you notice.
Prices are typically changed every six or 12 months – in January or July depending on where you live. However, many electricity retailers also change their prices outside of these times. Getting the best deal with variable rates will usually require ongoing homework, as providers may frequently tweak plans and rates to stay competitive.
The challenge for consumers is to decide whether there is better long-term value in fixing electricity prices, or staying with variable rates in the hope they don’t increase too much. Canstar Blue’s research shows that taking a gamble on fixed rates could be a smart move – not least because they can already work out cheaper than a retailer’s variable rate offers.
Fixed vs variable electricity plans in Australia
Fixed rate electricity plans tend to fluctuate. When the wholesale electricity market is difficult to predict, retailers have a habit of removing their fixed rate products.
At the time of writing, EnergyAustralia, Amber Electric and Red Energy offer fixed rate plans in some areas – the fixed plans could even work out cheaper than the variable rate deals. Just keep in mind that Canstar Blue is only comparing products from three energy providers, and there may be cheaper fixed or variable rate deals available in your area.
Fixed vs variable rates New South Wales
EnergyAustralia and Red Energy offer fixed rate plans to New South Wales customers. To give you an example of how these plans compare, we have calculated the average fixed rate cost over a year compared to the average variable rate prices from EnergyAustralia (based on the cheapest fixed and variable rate deals available at publication).
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $1,618 | $1,299 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 3911kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Ausgrid network in Sydney for a residential customer on a single rate tariff, but prices will differ between distribution areas. April 2024.
Fixed vs variable rates Victoria
When it comes to Victoria, we’ve compared EnergyAustralia’s fixed rate and variable rate plans to work which contract type is cheapest. Again, we’ve calculated the averages from EnergyAustralia’s cheapest fixed and variable rate plans.
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $1,395 | $1,062 |
*Annual costs based on plans from EnergyAustralia and Origin. Price assumes general energy usage of 4000kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Citipower network in Melbourne for a residential customer on a single rate tariff, but prices will differ between distribution areas. April 2024.
Fixed vs variable rates South East Queensland
EnergyAustralia and Amber currently offer fixed rate energy plans in South East Queensland. To see if a fixed rate plan can help you save some money, Canstar Blue has calculated the average fixed and variable rate prices from EnergyAustralia. We have compared EnergyAustralia’s cheapest fixed and variable rate offers at the time of publication.
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $1,871 | $1,792 |
*Annual costs based on plans from EnergyAustralia and Origin. Price assumes general energy usage of 4613kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on Energex network in Brisbane for a residential customer on a single rate tariff, but prices will differ between distribution areas. April 2024.
Fixed vs variable rates South Australia
South Australians pay more for electricity than anyone else in the country, so does a fixed rate energy plan offer any escape? EnergyAustralia and Amber currently offer fixed rates in SA. Below is how EnergyAustralia’s fixed rate price compares its variable rates (using its cheapest fixed and variable rate plans).
| Average Fixed Rate Cost | Average Variable Rate Cost |
|---|---|
| $2,257 | $2,120 |
*Annual costs based on plans from EnergyAustralia. Price assumes general energy usage of 4011kWh/year. Estimated price includes any conditions discounts that may be available. Pricing based on SA Power network in Adelaide for a residential customer on a single rate tariff, but prices will differ between distribution areas. April 2024.
Fixed or variable: Which type of plan is better?
Fixed rate energy deals are most beneficial for consumers who want a little more certainty over what they can expect to pay for electricity. And if you’ve found a fixed rate product that’s cheaper than many variable options, locking in a competitive price seems like a smart move.
However, there is no guaranteed right or wrong answer, as it’s impossible to predict whether fixed or variable rates will work out cheaper long-term. At the end of the day, the decision between fixed or variable rates could depend on what type of energy customer you are:
- You may want to choose a fixed rate plan if you don’t like the idea of regularly switching electricity providers and prefer a ‘set and forget’ approach to energy. Fixed rate contracts are likely to work out cheaper than sticking with a variable rate deal where the conditional discount has expired. Again, just be mindful that rates are usually only fixed for a benefit period of 12 or 24 months, so be sure to check in from time to time.
- You may want to choose a variable rate plan if you are happy to frequently change energy providers to find the best deal on electricity. Chasing the cheapest variable rates may prove the cheapest bet.
Like with any financial decision, tunnel-vision is your worst enemy when shopping around for the best deal on electricity. Make sure you understand your electricity usage and have considered your energy needs in the future.
Compare electricity plans
Below you’ll find some of the cheapest electricity deals available on our database. Keep in mind that these plans may be a mixture of both fixed and variable rate products. Always read the energy price fact sheets before signing up.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3911kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4613kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Image credits: Urbans/Shutterstock.com
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