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How to take control amid rising electricity costs
Energy bills are increasing for almost nine in ten Australians, forcing many to think outside the box when it comes to keeping costs and electricity usage down. While some are resorting to showering at the gym, others are keeping their bathwater in the tub to heat the room. These are significant lifestyle changes and disruptions to people’s ways of living for the end-goal of saving a few hundred dollars a year.
How to take control amid rising electricity costs
Energy bills are increasing for almost nine in ten Australians, forcing many to think outside the box when it comes to keeping costs and electricity usage down. While some are resorting to showering at the gym, others are keeping their bathwater in the tub to heat the room. These are significant lifestyle changes and disruptions to people’s ways of living for the end-goal of saving a few hundred dollars a year.
Amid a cost of living crisis, ongoing economic uncertainty, and fluctuating interest rates, it can be understandable to make lifestyle changes to be able to afford daily living needs. However, sometimes the easiest and simplest options are the ones that are most overlooked and undervalued.
Inertia is the enemy of growing household bills
Most Australian businesses don’t realise that by regularly comparing their electricity plans to other providers, they could be saving not just hundreds, but thousands of dollars every year. In fact, the ACCC found that more than 80% of households could move to a cheaper electricity plan if they made the time to compare.
Service providers are, unfortunately, very savvy to the reality that most consumers are unlikely to make regular comparisons and action those comparisons by switching providers. They’ll often take advantage of this inertia by steadily increasing prices, designing contracts that are difficult to cancel, and developing incomprehensive bills. This behaviour isn’t exclusive to energy providers – it’s happening across internet, mobile, financial services, and other utilities as well.
Switch fast, switch often
As well as constantly changing service prices, there are an ongoing range of offers, rebates, discounts, cashback schemes and more being communicated by both service providers and the government. It’s challenging for everyday Australians to keep updated with these announcements and changes, and people are often missing out on the best timing and opportunities to match their circumstances.
Making a one-off comparison to bring down the next electricity bill could be helpful in the short-term, but getting into the habit of regularly checking and making comparisons could save your household thousands of dollars every year. When checking different service providers, make sure you’re also assessing the full range of options in market. Some comparison sites position themselves as providing a wide range of choices, but are still limited to a select number of providers with commercial partnerships.
Understand your bills
One of the biggest challenges everyday Australians face with bringing down their household bills is understanding their bills in the first place. Service providers are not properly incentivised to make their bills comprehensive in a way that consumers can easily understand how to keep their costs down. There is a huge opportunity here for regulators to help bills become easier to read and action.
Until such changes are in effect, one of the most common traps that bill payers should be looking out for is the single rate service provider. In most cases, a time-of-use meter will provide more options, flexibility, and rate control for bill payers. Many service providers offer a single rate on a 24/7 basis, but having peak and off-peak rates gives people a better chance to take advantage of low rates when they kick in. For example, it may be cheaper to run your dishwasher, air con and oven on certain days and times. In comparison to the aforementioned examples, these types of lifestyle changes are much easier to manage, and simply involves checking the times and differences between peak and off-peak rates.
While energy and other household bills are likely to continue growing, Australians are far from stuck without options. Making comparisons has never been easier and now, with the emergence of AI in this field, there are more tech-driven options that can further remove bias from the comparison and recommendation processes. Start with asking yourself you last changed service providers. If it’s been more than a few months, it could be time to get into a simple routine of comparing and switching to beat service providers at their own game.
Ankit Jain is the CEO and Co-Founder of CIMET Holdings, a fast-growing Australian technology company powering energy, broadband, mobile, financial services, solar, and insurance comparisons through both the consumer brand Econnex and B2B white-label partnerships.
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