KEY POINTS
- Switching energy providers doesn’t mean any change to your power supply.
- The worst case scenario for cancelling an energy contract is that you’ll have to pay an exit fee.
- Avoiding the process of switching energy plans will eventually land you on the DMO/VDO offer, which is the most that deregulated state providers are allowed to charge.
Switching energy plans or providers can be daunting, especially when you consider how many myths surround the process.
In this article, Canstar Blue discusses some of the common misconceptions about switching energy providers.
This guide highlights eight myths that could be preventing you from getting a much better deal, and how to avoid them.
Eight energy switching myths:
- Myth 1: You need to cancel your current energy supplier before switching
- Myth 2: Your power will be cut off while you switch
- Myth 3: You can’t switch suppliers if you’re on an energy contract
- Myth 4: Renters can’t switch energy plans without landlord permission
- Myth 5: All energy companies are the same
- Myth 6: Switching suppliers means you’ll need a new meter installed
- Myth 7: You don’t need to switch because you’re protected by the Default Market Offer (DMO) and Victorian Default Offer (VDO)
- Myth 8: Switching energy providers is too much hassle
Myth 1: You need to cancel your current energy supplier before switching
You don’t need to call your current energy company ahead of switching to a new energy plan. This is a great way to avoid awkward phone calls and attempts to convince you to stay.
All you need to do is organise your new energy plan, which will then allow your new energy provider to organise everything with your old provider on your behalf.
Your energy supplier cannot refuse to let you switch, even if you owe money on your account – however, you may be legally pursued for any remaining debt if you’re behind on payments.
Myth 2: Your power will be cut off while you switch
Switching energy providers doesn’t mean any significant change to your power supply. At no point will your electricity be disconnected.
Energy retailers can only disconnect your home’s electricity if you’ve repeatedly failed to pay your energy bills.
Your new energy retailer will simply take over your account, charge you their rates and send you the bills.
Your home will still be powered in the same way, but be aware that any changes in your tariff structure could mean you are charged for your power differently than before.
However, any big changes should be clearly explained to you and agreed on by you when you switch.
Myth 3: You can’t switch suppliers if you’re on an energy contract
While all energy plans are technically a ‘contract’ (i.e. they come with various terms and conditions), no one will ever be locked into a contract they cannot quit.
The worst case scenario is that you’ll have to pay an exit fee to cancel the contract. If you’re switching to a cheaper deal, this fee should be recovered by the new plan’s savings.
The good news is that exit fees have become almost non-existent, so switching energy plans usually won’t cost anything.
However, if you’re on a plan that offers a conditional discount, some retailers will not honour it on your final bill before switching.
So if you’re getting a 20% discount from your old retailer, you can expect a much higher final bill. We always recommend reading the fine print before signing up.
Fortunately, not all energy retailers do this, but for some, it behaves as a deterrent to stop you from leaving early.
Compare energy plans
Here are some sponsored 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 energy 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 and to see other products in our database that may be available. 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.
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9% Less than reference price |
$1,651 Price/year (estimated) |
Go to Site |
Here are some sponsored 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 and to see other products in our database that may be available. 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.
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15% Less than VDO |
$1,260 Price/year (estimated) |
Go to Site |
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our 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 and to see other products in our database that may be available. 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.
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10% Less than reference price |
$1,888 Price/year (estimated) |
Go to Site |
Here are some sponsored deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from our 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 and to see other products in our database that may be available. 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.
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6% Less than reference price |
$2,036 Price/year (estimated) |
Go to Site |
Myth 4: Renters can’t switch energy plans without landlord permission
Renting a home doesn’t mean that you will be obliged to remain with the property owner’s choice of energy provider.
If it’s your name on the account and you pay the bills, you have the right to switch. The only exceptions could be:
- If your rental agreement states that you cannot switch providers (e.g. because the landlord pays the bills) or;
- Your home is part of an embedded network where all of the properties (e.g. in the apartment block) are supplied by the same retailer.
It’s important to read your rental agreement carefully and ask questions before signing it. Allowing your landlord to pay the utility bills or being part of an embedded network can have its benefits.
However, it always pays to make sure you understand what you’re committing to first.
Myth 5: All energy companies are the same
Electricity usage rates vary depending on the type of tariff you’re on. Over a year, being on a more expensive energy plan could end up with you paying hundreds more than necessary.
Energy retailers can also differ significantly with regards to customer service support, as well as other benefits they offer. Some provide 24/7 customer support, online chat functionality, GreenPower options, multiple billings, etc, but others may not.
This is why it’s important to compare not just the tariff type and usage and supply rates but also the extras offered on each plan.
Myth 6: Switching suppliers means you’ll need a new meter installed
Your electricity comes straight from the national energy grid, no matter which provider sends you the bills, so you won’t need a new meter or any other equipment if you switch.
The only person who will visit your property is the meter reader to take a final reading so your old supplier can send you a final bill (unless you have a smart meter or are using an estimated bill).
Some energy retailers offer to upgrade your old meter if you switch to them, in which case someone would need to visit your property. It’s worth noting that smart meters are gradually being rolled out across the country.
Myth 7: You don’t need to switch because you’re protected by the Default Market Offer (DMO) and Victorian Default Offer (VDO)
The Default Market Offer (DMO) and the Victorian Default Offer (VDO) are state-specific tariffs set by the Australian Energy Regulator (AER), which act as price caps for energy plans in New South Wales, South East Queensland, South Australia and Victoria. In other words, they act as reference prices for energy plans to be compared to but are not competitive prices. Energy plans with competitive deals can be hundreds of dollars cheaper per year, so it is a myth that you don’t need to switch because the default market offers protect you from paying too much.
Myth 8: Switching energy providers is too much hassle
Switching energy providers doesn’t have to be a hassle. It’s important to research and compare different providers, plans and price fact sheets to ensure you know everything about your prospective energy deal, including things like conditional discounts, fees and charges.
Once you’ve made up your mind, it only takes a few minutes to make the switch. Recent switching rules have made it so that switching energy accounts from one provider to another only takes around 48 hours, meaning you could be on your new deal within two business days.
Compare cheap electricity deals
If you’re keen to switch but haven’t compared energy plans yet, you can start with the free Canstar Blue comparison tool below.
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.
Original reporting by Simon Downes
Image Source: arturnichiporenko/Shutterstock
Switching energy provider FAQs
When you switch energy providers, your new energy retailer will typically email you to confirm the switch and welcome you on board.
They could then send out a letter in the mail or follow up with further emails, outlining all the details of your new plan with its terms and conditions.
If you don’t hear from your new provider within a few days, it may be worth a call to make sure they have received your request.
No. Your new provider informs your old supplier that you’ve switched, and that they will be taking over the supply for your address.
However, your old provider could get in touch to ask why you have switched and potentially offer you a cheaper deal to stay on with them.
Yes, once you make the switch, you have 10 business days to change your mind. Cancelling your new contract within the cooling-off period means you will not pay any exit fees.
Outstanding payments on your electricity account with your old provider will need to be finalised. You may also find that your old retailer has recalculated your final bill after switching, especially if you switched using an estimated bill, so this could be the final payment required from them.
If you find you are still being sent bills after you’ve paid your outstanding payments, it’s best to get in contact with your old provider to see if there has been an error.
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