Energy switching myths debunked

In this article, Canstar Blue discusses some of the common misconceptions about switching energy providers that could be preventing you from getting a much better deal. The below guide highlights seven of the most common misconceptions around switching energy providers and what you can do to avoid them.

Seven energy switching myths:

• Myth 1: Switching suppliers means you’ll need a new meter installed
• 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: You need to cancel with your current energy supplier before switching
• Myth 7: Switching energy providers is too much hassle

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Myth 1: 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 drop by. It’s worth saying that smart meters are gradually being rolled out across the country anyway.

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. Your new retailer will simply take over your account, charge you its own 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 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: 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 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. The good news is that exit fees have become almost non-existent in recent times, so most of the time switching energy plans won’t cost a thing.

However, there is one other thing you should be aware of when it comes quitting your energy contract. If you’re on a plan that gives you a conditional discount, some retailers will not honour it on 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 energy retailers do this, but for some it seems to be a deterrent to leave early.

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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 every 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 company.

It’s 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 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 the course of a year, being on a more expensive deal 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 offered by a provider, but also the extras that may be available on each plan.

Myth 6: You need to cancel with your current energy supplier before switching

You don’t need to call your current energy company ahead of switching to a new and better deal, which means you can avoid any awkward phone calls or attempts to convince you to stay. Your energy supplier also 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 7: Switching energy providers is too much hassle

Switching energy providers doesn’t have to be a hassle. 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, 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 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.

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