Guaranteed (Unconditional) Energy Discounts Explained


There’s nothing quite like the comfort of a guarantee, whether it comes in the form of an engagement ring, or just an order confirmation email from the pizza place down the road. So, when it comes to ‘guaranteed’ or ‘unconditional’ discounts on your energy bills, where big savings could potentially be had, there’s nothing better, right? Find out the answer to this and everything else you’ve been wondering about unconditional energy discounts below.

What is a guaranteed/unconditional energy discount?

It’s all in the name – an unconditional energy discount is simply a discount on your electricity or gas bill that isn’t conditional on any other factors. What this means is that you’ll receive a discount on your power bill regardless of how or when you pay.

This form of energy discount often isn’t as generous as those that are conditional on you paying on time or by means of direct debit, as energy companies don’t stand to earn anything from the agreement. More often than not, however, your unconditional discount will apply for a benefit period of 1-2 years, so it’s best to think of it as an introductory offer rather than a permanent solution to high power bills.

Are ‘unconditional’ and ‘guaranteed’ discounts the same?

The short answer is yes. Consumers might see one or the other referenced on their bill, but they essentially mean the same. Recent energy regulation changes have swayed toward favouring the word ‘unconditional’ in marketing energy plans, but some retailers are still using the term ‘guaranteed’. Remember that if you have any confusion as to what the words on your power contract mean, it’s best to contact your retailer for clarification.

What does a guaranteed/unconditional energy discount apply to?

Guaranteed Energy Discounts

A common assumption people make is that energy discounts will always apply to your whole bill. Something most people don’t know is that your energy bill comes in two parts (supply and usage), and more often than not unconditional discounts are applied to just your usage.

So we’re on the same page, the usage charge will typically make up a large portion of your energy bill, being the amount you’re charged based on how much energy you’ve actually used. The supply charge is a daily fee that you pay for having electricity connected up to your home, typically around $1 a day.

Before signing up to a plan it’s worth checking if your unconditional energy discount will apply to just your usage costs, or both usage and supply, as this could make quite a difference when it comes to how much you’ll save on your bills.

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What’s the point of a guaranteed/unconditional energy discount?

While conditional discounts (such as pay on time discounts) seem to make sense as energy companies benefit from consumer tardiness or inattention (i.e. you fail to pay on time, you end up paying more), what might not add up is why an energy provider would offer an unconditional discount in the first place.

As mentioned before, energy discounts work by way of being available for a short period of time, (typically just a year or two) meaning any offer that seems too good to be true might actually be. If it were the case that unconditional energy discounts were ongoing, it would make sense for energy providers to simply lower their base pricing and deliver the same savings, but since they often come with benefit periods, it’s best to consider them as welcome offers, not a lower overall rate.

Guaranteed/unconditional discount vs. pay on time discount

Guaranteed discount vs. pay on time discount

Although you’re likely to see pay on time discounts at the end of the fishing rod more than you will find unconditional discounts, switching to a plan with a pay on time discount won’t always be the best way to save money.

A pay on time discount will only be applied to your energy bill if you do exactly what the title suggests – pay on time. If for example you’re on a plan offering a 25% pay on time discount, but miss the bill due date, you’ll have to pay the full amount. Alternatively, if you’re on a plan with a 15% unconditional discount, you’ll receive the discount even if you pay a few days late. In that cycle, having an unconditional discount works out more beneficial than a pay on time discount.

If you are, however, the type to stay on top of your bills, a pay on time discount could help you save hundreds on your power bill in the year.

What other energy discounts are there?

You’ll be happy to know that there are other types of energy discounts available for those looking to save on their energy. Here are two other discounts you are likely to come across when comparing energy deals:

  • Direct debit discount: One easy way to see savings on your power bill is through direct debiting. What this means is that at the end of your billing period, however much you have due will be taken straight out of your bank account and payed to your energy provider. As a reward for this convenience, you could receive a discount on your bill.
  • Email billing discount: Gone are the days of paper billing, and if you’re tech savvy in the slightest, you could benefit by simply having your energy bill sent directly to your email inbox. This discount is often modest and applied to a benefit period.

Do I have a guaranteed/unconditional or conditional energy discount?

Energy discounts are confusing, and if you’re scratching your head wondering if your discount is unconditional or conditional, rest easy knowing there’s an easy way to check.

All of the details about how you’re charged for your energy should be listed on your last or current power bill. There’s no stock standard electricity bill, so where you’ll find this information will differ from provider to provider.

In the example below of an Origin electricity bill, the unconditional usage discount is listed on the last page, right under the ‘Discounts and Rebates’ subheading. In this instance, the unconditional discount was 25%, but it’s important to note that this amount will vary between plans and providers.

Which providers offer guaranteed/unconditional energy discounts?

Unconditional energy discounts aren’t as frequently seen as their pay on time counterparts. However, there are still lots of providers offering the discount on select plans. Here are the providers offering unconditional energy discounts within NSW, VIC, South East QLD, SA and ACT:

In a deregulated energy market, providers have the power to change discount amounts and terms as frequently as they want to, meaning the list above is also subject to change.

Ongoing discount vs. benefit period

While it’s true that most unconditional energy discounts will only be applied to a benefit period, there are some cases in which the unconditional discount will be ongoing. For instance, as of January 2019, Lumo and Red Energy (who are both owned by Snowy Hydro), are offering a unconditional and ongoing 10% discount for customers on standing offers. However, as standing offers almost always have higher rates than market offers, the ongoing discounted amount may still work out to be more expensive than a market offer. That said, even some market offers may have ongoing benefit periods.

Will a guaranteed/unconditional discount deliver me the best savings?

Guaranteed Discount Savings

In recent times, energy discounts and their ultimate value have become a hot topic. While they can be a great way to save on your energy bills, lack of transparency in the energy market has caused some major providers to remove their discounts all together, opting instead to reduce their rates to deliver the best power savings.

Our own research has revealed that in some cases, energy plans advertising the best discounts didn’t always equate to the best savings. This is due to discounts being applied to higher base rates, meaning in comparison to plans that just offer low base rates and no discounts, a heavily discounted deal could work out to cost even more. In reaction, the Australian Competition and Consumer Commission (ACCC) has revealed plans for an Electricity Reference Bill, which will supposedly make it easier to compare energy discounts to help you find the best bang for your buck.

At the end of the day, a great energy deal will ideally have a low base rate and solid discounts, so keeping an eye out for that will deliver you the best savings.

Is a guaranteed/unconditional energy discount right for me?

Whether an unconditional energy discount is right for you will ultimately come down to your personal habits. If you’re the forgetful type and are likely to miss a bill or cancel your direct debiting, a conditional discount might not be right for you. A discount that is set in stone will likely be a better option than a conditional discount in this situation, so weigh up the pros and cons and decide what is right for you.

Once you’ve made a decision, all that’s left to do is start comparing. Hit the button below to get started.

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