Households are losing out on hundreds of dollars in savings by not switching energy providers. Households are losing out on hundreds of dollars in savings by not switching energy providers.
Finance Consumer How to save up to $500 a year on your household bills Updated:

How to save up to $500 a year on your household bills

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Households are being reminded to double-check their energy provider’s rates and shop around after a national survey found millions of Australians are neglecting potential savings.

New research from consumer comparison website Finder found 18 per cent of consumers – equivalent to 3.3 million Australians – have stuck with their existing retailer despite believing they are on a bad deal.

With Australians collectively spending $1.9 billion on air conditioning over the three months of summer alone, Finder energy expert Graham Cooke said households could lose hundreds to the dreaded “lazy tax”.

“When you factor in the already expensive electricity bills and the cost of Christmas, this can all add up to give you a shocking new year financial hangover,” Mr Cooke said.

Households can lose $500 in yearly savings

Canstar Blue editor-in-chief Simon Downes told The New Daily households with an energy plan close to their state’s default market offer could be paying $400 to $500 a year more than customers with the best rates on the market.

He said the deficit is even larger for bigger families or those with higher-than-average energy consumption.

“If you’re going to switch plans, now’s a great time to do it, but make sure you pocket as much sign-up credit as you can from the retailer, as that will automatically cut down your next energy bill,” Mr Downes said.

Families can find out whether their plan – or any quoted deal – is among the most competitive by asking the retailer to compare the plan to their state’s default market offer.

That price – effectively a cap on what retailers can charge (reflecting the costs of providing electricity in a jurisdiction) – is typically shouldered by households that do not actively switch plans.

The cheapest plans are roughly 30 per cent lower than the state default offer in New South Wales and Queensland, and up to 20 per cent lower in South Australia and Victoria.

How to properly understand the energy rating system

The state default offer is only half the story, though.

Mr Downes said the best place to start when cutting energy use around the home over summer is by practising what he calls “conscious cooling”.

Essentially, he said, families can maximise their energy savings by directly associating their use of an appliance with the cost of doing so.

“So, for example, if you know your air conditioner costs you 12 cents an hour to run, that means you can start making informed decisions about how long to use it before costs start blowing out,” Mr Downes said.

“And more often than not, that information is actually staring people in the face – they just overlook it every single day.”

Mr Downes said appliances with energy star ratings typically show on their label an estimated figure of the kilowatt hours (kWh) they use.

By comparing that figure to the consumption charge listed on their energy bill (measured in cents/kWh), households can use “simple maths” to discover how much money their appliances eat up per hour.

CSIRO’s Anthony Wright also told The New Daily that families can massively improve their home’s energy efficiency – thereby reducing their bills – by making a handful of simple renovations.

Tips to reduce summer energy bills

  1. Shop around: Compare each deal you find to your state’s default market offer
  2. Curb unnecessary appliance use: Assess whether you need to run a second fridge or air conditioning in an unoccupied room
  3. Conscious cooling: Find out how much energy your appliances use per hour, and compare this to your plan’s consumption charge
  4. Pocket as much sign-up credit as possible: Not only can you switch to a plan with lower rates, but switching to a provider that offers sign-up credit can slash your first bill by up to 50 per cent
  5. Find other value-add benefits: Some providers have partnered with supermarket rewards programs that gift customers points for each dollar they spend on their energy bill, while others have deals with streaming providers (such as Kayo)
  6. Consider renovating to improve energy efficiency: Some states, including Victoria, subsidise some of the upfront costs associated with installing solar panels.