Energy Costs: How To Beat Electricity Price Rises

“Everything that could have gone wrong for our household energy bills has gone wrong in the past year or two,” says Joel Gibson, Campaign Director at One Big Switch and author of Kill Bills.

While the war in the Ukraine has played a part, wholesale prices started rising rapidly as economies recovered from Covid-19 and surging demand for goods resulted in demand for black coal and gas skyrocketing.

Gibson adds that wholesale energy prices are now triple what they were just a couple of years ago, and while a lag between wholesale prices and retail prices meant this has taken some time to cycle through to household bills, over winter retail prices increased by around 15-20%.

Coupled with the additional rises the government is forecasting, Gibson says “cumulatively, you get about a 56% increase in electricity and a 44% increase in gas [prices]”.

“In dollar figures, it’s pretty frightening, it adds up to $1300 extra over an 18 month period for an average household.”

Gibson notes that coal currently accounts for about 60% of Australian household energy supply, with gas accounting for about 20%. He says that while renewable energy will eventually lead to lower prices, it will be several years before households see that impact.

“In the long term, renewable energy will be the cheapest form of household energy available to us. For those who’ve put solar panels on their roof, for example, it is already the cheapest form of energy.”

However, he says that there will be transition costs to both governments and households in the shorter term, as the government grapples with generating, storing and distributing renewable energy to businesses and households across Australia.

“Just like when a household goes solar, there’s an initial cost, and you can extrapolate that to the broader retail electricity market. There is going to be an initial cost in transitioning from fossil fuels to renewable energy.”

Consider Switching Providers

“If you’re in a state where you can switch between providers there are hundreds of dollars difference between the best and the worst plans on the market,” Gibson says. “If you’re being charged a price higher than the government reference price, you’re being overcharged.”

Individuals and businesses in NSW, Queensland, South Australia, Tasmania and the ACT can compare prices from different providers at government website Energy Made Easy, while Victorians can use Victorian Energy Compare, and are eligible for a $250 rebate simply for visiting the website and comparing prices.

Seek Out Concessions and Rebates

Most state and territory governments offer energy-related rebates to concession card holders, pensioners and low-income households. Some also offer rebates for taking actions such as switching from halogen to energy efficient LED downlights or installing more energy efficient household appliances. You can search for concessions and rebates at www.energy.gov.au.

Beware Vampire Power

You may not realise that when appliances are plugged in and switched on, they are using power, even when they are not in use. In the industry, this is known as vampire power.

“One of my retailers used to give me a graph of where all my power was going, and at one point I had a bill that told me that 15% of my usage was appliances on standby so they can really add up,” Gibson says.

Check your Tariff

Check your bill to see if you are on a single rate or a time-of-use tariff. A single rate tariff means a flat rate is charged for energy usage, while time-of-use tariffs have peak and off-peak periods, when power is more or less expensive, respectively. For households on a time-of-use tariff, using appliances during off-peak times can result in cost savings.

Avoid Power Guzzlers

In terms of energy consumption and efficiency, the biggest power guzzlers are heating, cooling, hot water, pool filters and pool heaters, Mr Gibson explains. Smarter use of these appliances, such as running them at off-peak times, limiting their use and using eco settings can help save money.

Another related tip is to avoid running the dishwasher or washing machine half full and opt to line dry rather than use a clothes dryer if possible.

Make your Home More Energy-Efficient

If you can afford it, ensuring homes are well insulated and windows and doors are well sealed can be cost effective, as can installing or upgrading solar panels. The energy efficiency of any appliances being upgraded or installed should also be considered.

Re-think Gas

Gibson says the days when gas was significantly cheaper than electricity are gone, so homeowners should consider electric appliances when replacing or upgrading.

“A lot of people put in gas heating, cooking and hot water because it was substantially cheaper, but it’s actually not anymore. Longer term, the cheapest way to heat and cool your home or your hot water is going to be going electric and powering it from solar panels,” he says.