No one wants to pay more for power than they need to, but if you’re not a savvy energy shopper, that’s exactly what could happen to you. To find the best deal on electricity, you need to understand how pricing works and what to look for from an energy provider, including the discounts they offer. Sounds like a lot of hard work, doesn’t it? Well, Canstar Blue aims to make sense of the complicated and has produced a cost comparison for electricity retailers in Melbourne, showing their cheapest offers and what you can expect to pay. No gimmicks – just helpful, real costs that show where you can find a better deal.
Everyone in Victoria knows how competitive the local energy market is, but it can be hard to see through all the promotional material and work out if you’re really getting a good deal or not. That’s why we’ve crunched these numbers to show where you can find the cheapest electricity rates in Victoria if your home is on the Citipower network and what you need to do to get them. It’s worth noting, however, that there are five electricity distribution networks in Victoria and prices may change depending on where you live.
Based on the cents per kWh usage prices and daily supply charges of the energy providers we’ve compared, plus average energy consumption figures, the following table shows estimated annual electricity costs for five person households on the Citipower network in Melbourne. To get a specific quote for your suburb, use our comparison tool below.
Compare VIC Electricity Plans
Which electricity provider is cheapest in Victoria?
Based on this price comparison of 19 energy retailers, we see that Alinta Energy, Tango Energy and Amaysim Energy offer the cheapest electricity in Victoria after factoring in any discounts. Notice, however, that about half the plans we’ve listed below only supply a discount for a benefit period of 1 or 2 years. Once this time is up, you will lose the discount and be left paying more for electricity unless you do something about it.
|Electricity Provider^||Electricity Plan||Discount||Annual Cost*||Benefit Period|
|Alinta Energy||Fair Deal 43||43%||$1,993.04||2 years|
|Tango Energy||Home Select||0%||$2,016.82||1 year|
|Amaysim Energy||Electricity 2||35%||$2,039.67||Ongoing|
|Sumo Power||Residential 37||37%||$2,108.21||1 year|
|Dodo Power & Gas||Market Offer||40%||$2,114.28||Ongoing|
|Momentum Energy||SmilePower Flexi||0%||$2,191.66||Ongoing|
|EnergyAustralia||Secure Saver||30%||$2,201.30||2 years|
|Click Energy||Click Agate||27%||$2,290.71||Ongoing|
|Powerdirect||Residential 33||33%||$2,291.16||1 year|
|Red Energy||Living Energy Saver||10%||$2,431.85||Ongoing|
|Origin Energy||Maximiser||30%||$2,438.52||1 year|
|Simply Energy||Simply Plus||35%||$2,506.54||2 years|
|CovaU||Smart Saver||34%||$2,574.43||1 year|
|Diamond Energy||Market Offer||10%||$2,726.33||2 years|
|1st Energy||1st Saver||40%||$2,740.39||2 years|
*Costs based on annual statistics from AER for a five person household on the Citipower electricity network in Melbourne. March 2018. One non-exclusive energy plan per retailer shown.
^By clicking on a brand name, you may leave Canstar Blue and be taken to a referral partner to compare. You agree that Canstar Blue’s terms and conditions apply to this referral. If you click on a brand that is not a referral partner, you will be taken to a brand page on Canstar Blue.
As you can see from the table above, discounts give a rather mixed message to customers. For example, despite 1st Energy having one of the largest discount in Victoria, there are many other plans with smaller discounts that work out cheaper. The same is true of Simply Energy. What this suggests is that customers need to be vigilant when comparing electricity deals. Don’t get too fixated on huge discounts and make sure to check you’re receiving competitive rates on energy and signing up to an appropriate plan.
Fixed vs variable rate plans
Most of the electricity plans listed above come with variable rates, meaning the prices you are charged can be changed at any time. That’s why it’s important to regularly review your power bills, to make sure nothing has changed. However, some retailers also offer fixed rate plans, whereby rates are locked in for a set term and do not change. The only providers to currently offer fixed rate plans are Tango Energy (formerly Pacific Hydro), EnergyAustralia and AGL. If you find a competitive fixed rate deal today, it could prove to be a smart financial move in the future. The downside to fixed rate plans is that they usually come with exit fees for leaving early, so make sure you read the small print before signing up.
How to get the best energy discounts
Discounts can help slash your energy bill dramatically, so long as you meet the discount conditions. Otherwise you will be left paying the full amount and could even face a fee. Pay on time discounts are the most common, but some providers require customers to pay by direct debit to get their discounts. Others make customers do both, as well as receive their bills and other correspondents via email instead of post. Conditions can get pretty detailed, with GloBird Energy, for example, insisting that customers pay by credit card in order to receive its lowest rates.
When comparing discounts, it’s important to check whether you’re getting a discount off your entire bill, or just the usage or supply charges. Providers including Lumo Energy and Red Energy have whole bill discounts, while most retailers apply discounts only to the usage charges. Also be conscious of benefit periods, as some discounts may look very attractive when you sign up, but could disappear after the first 12 months and will no longer be available. Powershop and Click Energy are two retailers that offer ongoing energy discounts. Make sure that, if you agree to a two-year contract, the benefit period is also two years. Some providers have been known to offer a benefit period of only 12 months on a two-year agreement.
Discounts have become the main point of difference when comparing energy providers in Victoria, so pay attention to what you’re really getting. For most large households, a discount off usage costs will be more beneficial than a discount off fixed supply charges. Whole bill discounts also tend to result in good savings.
Here are some questions you should consider asking any prospective energy company:
- Is the discount off the entire bill, or just usage or supply charges? As usage charges make up the majority of most electricity bills, this should be your preference, although some energy providers do take discounts off your entire bill.
- How long is the benefit period? It’s typically that the headline discount offers you see will only apply for the first year of your plan. After that, you will start paying the non-discounted cost, which as you can see from the table above, are a lot more expensive.
- What are the conditions of your discount and what happens if you don’t meet them? Most people will find it easy to pay their bills on time or by direct debit, but failing to do so one billing period could result in you losing the benefit all together. You could even be slugged a fee.
In addition to big discounts, you will also be presented with a range of different sign-up incentives, such as those mentioned below. However, it’s also worth pointing out that some retailers, most notable Tango Energy and Momentum Energy, now market themselves based on the fact that they have no ‘confusing’ discounts.
Victorians are inundated with different incentives to try and persuade them to sign up with a particular electricity provider. For example, Lumo Energy has a rewards program called ‘Lumo Ameego’ whereby customers can benefit from discounts at a range of retailers. You can also get money off cinema and theme park tickets, amongst other things. Other providers offer a credit on your first bill when you sign up online, usually a fairly modest $50 or $100. Meanwhile others try to attract customers based on their hobbies – be it going to the movies, or supporting a sports team. For example, Simply Energy has an energy plan promising ‘free’ Gold Class movie tickets over two years and has also had a plan offering a $100 megastore voucher for the Hawthorn Football Club.
While these discounts can be appealing, it’s important not to let them dictate your overall decision. This should be made based on a provider’s usage and supply charges, and what you expect to pay when the bill arrives every month or quarter. These incentives can, however, be a very useful point of difference when comparing similar offers.
Which electricity provider is rated highest in Victoria?
No one wants to pay more than they need to for electricity, so it makes sense that the bottom line will decide which provider many consumers agree terms with. However, other factors, most notably customer service, can also prove important. Call centres are a major bugbear for customers because there’s nothing worse than hanging on the phone for ages, trying to get a straight answer to a straight question. The energy companies should be working hard to keep you happy, in terms of the price you pay, but also the customer service you receive. That’s the reason why Canstar Blue produces customer satisfaction ratings for electricity providers in Victoria every year. Powershop is currently rated highest overall.
If there is one message to take away from this report, it’s that regularly reviewing your electricity plan and comparing it to other offers on the market is a wise move, particular in Victoria where the energy companies are competing hard for your custom. You might just save a few bucks.