Need to know
- Switching to a cheaper energy deal could save you up to $760 a year
- Differing tariffs, fees and charges make it difficult to compare plans without help
- Many comparison sites only examine a portion of the market
Energy switching rates are at an all time high. With hundreds of dollars in savings available, you should consider it too.
But how do you know which switching sites to use, and which to avoid?
Are you paying too much for energy?
The Australian Energy Market Commission (AEMC) 2019 retail energy competition review found that switching rates hit a record high of 24.4% last year, with most customers preferring to put their business with smaller players.
There are now 40 energy retailers vying for business, and the "big three" – AGL, Origin and Energy Australia – no longer hold the biggest market share in South-East Queensland and South Australia. This is a huge shift, when you consider that in 2018, 70% of Australian households were with one of the big three.
The AEMC also reports you could save up to $760 a year on your power bills by switching to a cheaper plan, depending on your energy needs and the type of plan you're on.
"Increased competition has led to price cuts and large reductions in market concentration," says AMEC chair John Pierce.
So how do you find out which retailer has the best electricity deal? With the energy market being one of the most confusing confuse-opolies of all, it's not surprising that many people turn to comparison sites to work it out for them. But are they really giving you the full picture?
What's wrong with energy comparison sites?
The main issue with commercial comparison sites such as iSelect, Compare the Market or Canstar is that they're not searching all the available deals on the market.
iSelect is upfront on its Compare Energy home page that it only compares offers from energy retailers they've partnered with.
A disclaimer makes clear that the site is unlikely to recommend the best deal on offer in the energy market, since it only compares a portion of that market: "iSelect does not compare all providers or plans in the market. Not all plans or special offers are available at all times, through all channels or in all areas. Not all plans made available from our providers are compared by us and due to commercial arrangements and availability, not all plans compared by us are available to all customers."
Like iSelect, Compare the Market is also clear about the limitations of its comparisons, saying, "We don't have access to all of the products available in your area: we do not compare all brands in the market, or all products offered by all brands. At times certain brands or products may not be available or offered to you."
And while Compare the Market claims its commission-based business model doesn't influence its presentation of energy plans, the company receives a commission each time one of their customers takes out a new energy offer.
Considering that Compare the Market captures only 12 of the 40 energy retailers on the market, an argument could be made that commissions are influencing which energy plans are presented to users.
Other commercial energy comparison sites suffer from the same shortcomings as iSelect and Compare the Market.
Recommended comparison sites
Free to compare
The federal agency's Energy Made Easy comparison site is a non-commercial website whose existence was mandated by the National Energy Retail Law that came into effect in July 2012. It compares the available deals in your area and lets you know which are the cheapest. You can't upload a bill, but you can get a more personal estimate by entering your electricity or gas usage from a recent bill. You'll also need to manage all the switching yourself.
In Victoria, the state government's Energy Compare website lets you compare all the available energy prices and plans in your area, and you can upload your most recent bill for more personalised results.
Paid compare and switch service
CHOICE has partnered with new service Bill Hero to find you the best energy deal and switch you to it.
Bill Hero meets CHOICE's standards for a consumer-friendly switching service because it doesn't take commissions from retailers and it compares every publicly available deal. We think it has merit because it's based directly on our discontinued energy switching service, Transformer.
A $49 subscription covers the costs of the service:
- comparing the publicly available plans from every retailer
- managing your switch for you
- continuing to monitor the market for better deals.