Changing energy provider can be a long and arduous task, riddled with hidden rules and conditions. The 2016 Retail Competition Review by the Australian Energy Markets Commission indicates that 50% of customers have not switched energy provider in the last five years. If you fall into the 50% who have, or are looking to switch provider, there are a number of things to look for when doing your research.
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Beware of deals too good to be true
Energy providers, like all big retailers, want to retain customers. Often if you call up to let your energy provider know you are switching, they will offer you a super-hot deal on the spot to keep you signed. But these deals are usually only valid for six to 12 months and can ultimately leave the customer worse off than before.
If your energy provider offers you a new deal that sounds too good to be true, don’t immediately take their word for it. Always ask the following questions:
- How long will the new rates last? It’s common for energy providers to bump tariffs back up again. Make sure you understand the whole contract that you are agreeing to.
- Why does it take you leaving to get a better deal? Energy providers should be looking out for you all the time. So why does it take you switching provider for them to offer you a better deal?
Don’t be fooled by discounts
Big figure discounts can be misleading, especially when you hear numbers like 50% being thrown into the conversation. You think to yourself that a discount this big just has to save you money, surely? Unfortunately, this is not always the case. Take the following steps:
- Calculate the net cost to you by looking at the tariff being offered and applying the discounted rate. A big discount may not actually save you money if the underlying tariffs are high. Take a look at your last bill to find out what tariff you’re currently on and calculate any discounts using this figure. You may find yourself slightly surprised, and not in a good way.
- Compare energy providers as you shop around. Flashy numbers, websites and brochures can make an energy provider seem more appealing than their numbers indicate. Compare energy providers by using comparison websites, such as Canstar Blue which publishes customer satisfaction results with energy providers rated on the value for money they are deemed to offer.
Remember to shop around and not rely on one source.
Consider the service you receive
An important factor when choosing an energy provider should always be customer service. With so many tools and products on offer these days, all energy providers are offering their own perks to sweeten the deal, like high bill alerts or uncapped energy.
When considering these perks and weighing up options, it is also vital to assess the kind of customer service you will receive. Think about what is important to you:
- Will your call be answered by a human or machine?
- Where will your call be answered? In Australia or in an offshore call centre?
- Will you receive expert knowledge and have your questions answered correctly and on the spot?
Where does the solution stand?
The ideal scenario would include smaller Australian-owned and operated businesses who pride themselves on customer service. There are many factors to be mindful of when researching and switching energy provider. Do your homework and get informed to avoid falling into a money draining energy trap.
About the author
Domenic Capomolla is the founder and CEO of Sumo Power. Having worked in the energy industry for close to 20 years, Domenic is an expert on deregulated and contestable power and gas markets.