There are big savings to be had by shopping around for electricity and the consumer watchdog is advising households to take advantage of the deals on offer.
Major falls in wholesale electricity costs and new laws requiring retailers to pass on cuts are likely to result in lower electricity bills in 2021.
Residential consumption rose by 10 per cent and household bills increased by 7 per cent in 2020.
Households could save almost $200 a year by shopping around.
Australian Competition and Consumer Commission chair Rod Sims on Thursday released his latest report on power prices.
Mr Sims said he was concerned many households and businesses were still on power “standing offers”, which were about 18 per cent more expensive than market offers in 2020.
A typical household on a standing offer could save almost $200 per year by switching to a median market offer.
The proportion of small business customers on standing offers in 2020 was 16 per cent, which is more than double the residential proportion, and this percentage has not dropped over the last three years.
Mr Sims said for a typical small business customer, the median standing offer was 35 per cent more expensive and the annual saving from switching to a median market offer was almost $350.
“Standing offers were originally intended to be a safety net for customers to get a basic service at a reasonable price, but over time they became some of the highest-priced plans,” he said.
The report noted with wholesale electricity spot prices down 50 per cent since early 2020, the ACCC would be keeping a close eye on the reductions which “must flow through to future customer bills”.
Early solar adopters are reaping a windfall from their investment.
In 2020, prices paid by solar residential customers were 29 per cent lower than those paid by non-solar residential customers, after accounting for feed-in tariffs.
The average household with solar paid $94 less on their quarterly bill, despite using more energy from the grid.
Prices paid by solar small business customers were 31 per cent less than non-solar businesses.