Energy Switching Myths Debunked

Energy Switching Myths Debunked

Fact Checked Fact Checked

Canstar Blue aims to bust some myths around switching energy providers to help you on the path to find some significant savings.

Australians are feeling the heat of ever-increasing power bills, but simply the thought of switching energy providers is enough to provoke a cold sweat from many of us. But it really doesn’t have to be this way.

There are many common misconceptions about switching that could be preventing you from getting a much better deal. That’s where Canstar Blue comes in – to bust these myths and get you back on track with your household energy budget. Our guide below highlights six of the most common misconceptions around switching energy providers and what you can do to best them.

Myth 1: ‘I don’t want the installation hassle’

Taking notes?

You might think that switching power companies means a complete overhaul is required and that an engineer will need to visit your home to install a new meter. This is definitely not the case. Your electricity comes straight from the national energy grid, no matter which provider sends you the bills. 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 – in which case readings are automatically sent digitally – or you 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 drop by – but you don’t need to agree to this. It’s worth saying that smart meters are gradually being rolled out across the country anyway.

Myth 2: ‘I don’t want the power to go off’

As we mentioned previously, switching energy providers does not mean any significant change to your actual power supply. At no point will your electricity be disconnected. Your new retailer will simply take over your account, charge you its own rates, and then 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 in a different way to before. However, any big changes should be clearly explained to you when you switch, and you would have to agree to the changes first anyway.

Myth 3: ‘I’m under contract and can’t switch’

Contract Agreements

The word ‘contract’ sounds scary, but in the world of power supply it’s a little misleading. While all energy plans are technically a ‘contract’ (i.e. they come with various terms & conditions) no one will ever be locked into a contract they cannot simply quit. The worst case scenario is that you’ll have to pay an exit fee to cancel the contract – but this is usually only around $20. If you’re switching to a better deal, this cost will quickly be recovered. In fact, the good news is that exit fees have become almost non-existent in recent times, so most of the time switching won’t cost you a thing – other than a little time.

However, there is one other thing you should be aware of when it comes quitting your old contract. If you’re on a plan that gives you a conditional discount, some retailers will not honour the discount for your final bill before switching. So if you’re getting a huge 20% discount from your old retailer, you can expect a much higher final bill. It’s a bit sneaky from the retailers, but a good example of why you need to read the small print before signing up. Fortunately not all retailers do this, but for some it seems to be their way of punishing you for leaving…

Ready to make the switch? Compare from these cheap electricity deals now

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.

Myth 4: ‘I rent and need to stick with my landlord’s plan’

Renting a home doesn’t mean that you will have to be tied down to the property owner’s choice of energy provider. If it’s your name on the account and you pay the bills, you have every right to switch, especially if you think you can get a better deal. The only exceptions to this 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 company

It’s clearly important to read your rental agreement carefully and ask lots of questions before signing it. Allowing your landlord to pay the utility bills, or being part of an embedded network, can have its benefits. But make sure you understand what you’re getting into first.

Myth 5: ‘All energy companies are the same’

This is a perfectly understandable sentiment considering the ever-increasing cost of energy, but you may be surprised by just how different power companies can actually be, especially when it comes to the rates they charge. Electricity usage rates vary depending on the type of tariff you’re on. Over the course of a year, you could end up paying hundreds more than you need to if you’re getting a bad deal. Retailers can also differ significantly with regards to the customer service and support they offer. Some have 24/7 customer support. Others pack up and go home at 5pm on Friday.

Myth 6: ‘Switching is just too much hassle’

Frustrated Bill Payer

Switching energy providers doesn’t have to be a hassle. You can switch online in as little as five minutes. However, it’s really important to do your research first, which means comparing different providers, plans and price fact sheets to ensure you know everything about your prospective energy deal, including things like conditional discounts and fees & charges. Once you’ve made up your mind, it only takes a few minutes to go ahead and make the switch. Plus, new switching rules have made it 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.

Switching Energy Provider FAQs

How do I know if I’ve switched providers?

When you switch energy providers, your new retailer will typically email you to confirm and welcome you onboard straight away. They could then send out a letter in the mail – or follow up with further emails – outlining all the details of your new plan and terms & conditions etc. If you don’t hear from your new provider within a few days, it may be worth a quick call to make sure they have received your request.

Do I need to contact my old provider after I switch?

No. The good thing about switching energy companies – in addition to getting an improved deal – is that your new provider takes care of informing your old supplier that you’ve had enough of them, 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 with them.

Can I change my mind after I switch providers?

Yes. When you set the wheels in motion to switch energy providers, you have at least 10 business days to change your mind. This is known as a ‘cooling off’ period. Cancelling your new contract within this time period means you will not pay any exit fees.

Why have I been sent a bill from my old provider after switching?

Unfortunately, if you still have outstanding payments on your electricity account with your old provider when you switch, you will still need to pay those off. You may also find that your old retailer has re-calculated your final bill after switching, especially if you switched using an estimated bill, so this could be the final payment required from them that’s made it’s way through.

If you find you are still being sent bills after you’ve paid your outstanding payments though, it’s probably best to get in contact with your old provider, to see if there has been an error.

Jared Mullane
Energy Contributor
Jared Mullane covers Australia's retail energy market and has been cited as an energy expert by media outlets ranging from 9News, the ABC, The New Daily and 2GB. He holds a Bachelor of Journalism from Griffith University and has worked in the comparison industry for over half a decade.

Share this article