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The Guardian - AU
The Guardian - AU
National
Peter Hannam

Energy costs explainer: how can I cut my electricity bills or get assistance?

A bird sits on electricity wires with a rainbow in background
Calling your energy retailer should be your first step in seeking lower costs, says the independent body Energy Consumers Australia. Photograph: Lukas Coch/AAP

Elevated electricity prices seem here to stay but it doesn’t mean your household or business energy bills need to go through the roof, experts say.

The defeated Morrison government delayed the Australia energy regulator’s verdict on its standard market offer for electricity prices until after the election. Now that it’s here, the increase of as much as 18% for many users will come as a shock amid other price increases.

But figuring out how to cut your energy bills or get assistance when you need it can be complex, says Alan Pears, an industry fellow at RMIT University in Melbourne who has for decades advised families and companies on how to cut energy consumption and bills.

“Everything is so complicated for most people,” Pears says. “You almost need someone to hold their hand.”

Sure, there are websites, such as the federal government’s Energy made easy, set up to help people find their way through the maze. Each of the three big retailers – AGL, EnergyAustralia and Origin – also offer a blizzard of savings tips, as do others.

The trouble is “no one really trusts energy retailers, so why would I trust info from them?” Pears says.

So what can you do?

1. Shop around

In its release of the marked-up power price offers on Thursday, the regulator advised customers to “shop around” to cut repayment. “Based on offers available in May 2022, residential customers switching from the [new default market offer] to the median market offer could save between $294 and $443 depending on their network region, while small business customers could save between $733 and $1,308.”

2. Call your retailer

Energy Consumers Australia (ECA), an independent body set up to help users save money, says calling your energy retailer should actually be your first step. One reason is that switching retailers alone – which about one in four household do each year – often doesn’t produce much satisfaction.

Surveys by the ECA found people often switched “because my last retailer annoyed me, but I think I’m getting as ripped off by the retailer I moved to as the retailer I just left”, Lynne Gallagher, the group’s chief executive, says. “If you ask consumers, did they feel better after switching? The answer was no.”

Retailers are legally required to offer help for those struggling to pay, not least because energy is an essential service. Pears recommends hard-hit households seek timed payments from their retailer to average out payments over the year. That would assist those about to cop their largest bill for the year over winter.

3. Ditch gas

The ECA’s survey of consumer behaviour found almost one-in-10 households were considering ditching gas altogether, relying instead on heat pumps to provide heating or cooling that are less expensive to run.

4. Hack your home

The ECA also suggests “hacking your home” by buying inexpensive door snakes, floor rugs and even weatherproof tape to improve comfort and reduce energy waste.

Larger projects, such as installing insulation or buying solar panels or batteries, should also save money, but come with upfront costs that many people under financial stress may not be able to cover, Gallagher says.

Some 3m households now have solar panels in Australia, a number likely to double by 2030, she says. However, that would still leave about 6m in rental houses or apartments without easy access to solar. “As many as a third to a half will never have solar,” she says.

5. Find assistance

Government programs that might offer support for consumers struggling to pay their bills can be hard to navigate.

Victoria offers a $250 power saving bonus, while NSW offers a voucher scheme, but Pears says governments would do well to have on-call advice.

By contrast, the Queensland government on Thursday announced a $175 rebate that will automatically show up in utility bills, up from a previous $50 pledge.

Both Gallagher and Pears says the change of federal government will likely give greater prominence to energy savings not just to ease the cost squeeze but also to accelerate the cut in greenhouse gas emissions.

“There’s a sense of urgency now, I think, with the election results,” Gallagher says, adding that the additional of more Greens and so-called teal candidates “means you’ve got a better chance of bringing people together around these problems and getting solutions”.

She particularly welcomed Labor’s support for “community batteries”, which have the potential to share the benefits of emerging technology to those in apartments or otherwise not able to access storage.

Since Labor’s other plan to spend as much as $20bn to improve transmission and increase the share of low-cost renewables into the grid will take years to have an impact, high power prices are likely to be the norm, both experts says.

“You’ve got insulate yourself from energy prices as much as you can by improving your efficiency,” Pears says. “Everyone’s prices are spiking 10-20% and it could get worse.”

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