Why now’s a good time to compare energy deals

There are few times more likely to see Aussies scrutinising their household bills than in June, when both tax returns and winter heating costs are looming. There’s another good reason to be particularly bill-conscious mid-year, though.

From July 1, customers on the default market offer (DMO) will stand to benefit from a price reduction in New South Wales, south east Queensland and South Australia. Sticking with the DMO doesn’t mean a good deal is guaranteed, however. As the name suggests, the DMO is the default price or ‘standing offer’ that is normally less competitive than market offers, instead acting as a safety net for consumers who haven’t switched deals or providers in a while.

Nor does a reduction in DMO prices mean that consumers on market offers will receive a corresponding reduction in their own rates.

So while it’s welcome news that prices on these default plans are coming down, there were still better savings to be found, Canstar Blue’s Energy Editor, Jared Mullane, explained.

“Price is king when it comes to energy, so it’s nice to see customers paying the most on expensive default offers will likely see lower prices from July 1, and hopefully these changes will trigger further competition among retailers,” he said.

“Now’s a great time to start comparing energy plans, whether you frequently search for a better deal or you’ve been with the same provider for years. Plus, with winter officially here, seasonal changes to our usage are likely to inflate household energy costs.

“Thankfully in most cases today, bill-payers aren’t locked in to contracts, and given that exit fees are generally a thing of the past, consumers have the power to get up and leave if they’re paying higher than average electricity rates or if the level of customer service isn’t up to scratch.”

Mr Mullane pointed out that aside from benefitting as soon as possible from a cheaper energy offer, there was another good reason to get in early on researching your options and – if you find a better one – making the switch.

“Decreases in the default offer price could actually force providers to raise prices for their market-offer customers as the gap between these deals and the default price becomes slimmer. So, getting in sooner rather than later and locking in a good deal may pay off.”

Similar changes are set to take place for Victorians, with prices to the Victorian Default Offer (VDO) still being determined by the state regulator, the Essential Services Commission (ESC). Rules in the state changed recently to require retailers to inform customers on their bills of the ‘best offer’ available. That way Victorians have access to information that could potentially lead them to find a fairer or more affordable energy plan, according to the ESC.

How to ensure you’re getting the ‘best deal’

Most Australians are already on competitive deals, known as market offers, that usually come with cheaper electricity rates as well as other bonus incentives such as discounts and rewards programs. That said, research suggests some customers, particularly in the ACT and south east Queensland, haven’t got the memo, or are simply unaware there may be better deals out there.

The table below shows what percentage of energy customers are still paying default prices in each state and territory.

State Percentage of residential customers on market offers Percentage of residential customers on default offers
NSW 88.6% 10.7%
VIC Data unavailable 6%
ACT 67.6% 32.2%
QLD 61.1% 38.7%
SA 92% 7.8%

Source: Australian Energy Regulator, Retail Energy Market Performance update for Quarter 1 2020-21, Types of contracts. Essential Services Commission, Victorian Energy Market Update March 2021, Electricity customers on the VDO.

The table shows that Victorians and South Australians have the lowest proprortion of households on costlier default offers, while one in 10 bill-payers in New South Wales could still be paying too much. But about one in three customers in the nation’s capital and in south east Queensland may be able to find a better deal by switching.

In fact, a recent Canstar Blue survey revealed that fewer than half of Aussies (46%) believed they were getting a good deal on electricity, yet only 17% said they’ve switched providers in the past two years. If there’s ever been a potential solution to a problem, it can’t get any clearer than this, though; comparing energy providers’ products and prices is easy! Check out some of the cheapest energy deals currently available on our database by clicking on your state below. Or use our free comparison tool to browse a range of deals specific to your area.

Cheap Energy Deals

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 3900kWh/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 4600kWh/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 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.

Will my energy bills increase during winter?

The cost of heating our home in winter can quickly add up if you’re not keeping a close eye on which appliances you use to keep warm. At Canstar Blue we’ve crunched the numbers to see how much winter heating costs can add to the average electricity bill across Australia.

Average winter heating costs below are based on a specific set of assumptions across a range of different types of heaters, usage rates and total energy consumption (kWh/MJ). For a full break down of how much winter heating can add to your energy bills, visit our guide here.

State Average Quarterly Electricity Bill Average Winter Heating Costs
Victoria $253 – $114 (electric)
– $135 (gas)
– $73 (air con)
Queensland $310 – $117 electric)
– $189 (gas)
– $75 (air con)
New South Wales $355 – $134 (electric)
– $140 (gas)
– $85 (air con)
South Australia $361 – $185 (electric)
– $227 (gas)
– $118 (air con)

General guide only. Average energy consumption figures based on a sample of electric and gas heaters and air conditioners. Prices are based on average electricity and gas rates on a single rate tariff in each capital city – Sydney, Melbourne, Brisbane and Adelaide. Average usage costs based on Canstar Blue’s database for an annual usage of 14,900MJ (gas) and 4,200kWh (electric/air con). Accurate as of May 2021.

Now’s the time to shop around and save

Rather than shivering through winter and hoping your retailer will offer a cheaper energy price on the stroke of July 1, now’s a good time to check out some of the latest electricity deals, especially given that there’s no guarantee the plans and promotions on offer today will be available tomorrow.

And don’t forget that providers are constantly coming up with new ways to attract customers in a competitive energy market, other than just lowering prices. Whether it’s Frequent Flyer points, ongoing bill credits or access to rewards programs that offer discounts to some of Australia’s leading retail outlets and venues, spending a few minutes comparing energy plans today could pay off well beyond winter.


Image credit: hidesy/Shutterstock.com

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