As the cost of living continues to rise in Australia, the impact can be felt most prominently in mortgage payments and energy bills. In the last quarter of 2022, electricity and gas prices surged by over 15%, putting additional strain on household budgets. This article aims to address the reasons behind the soaring energy costs, predict the expected rise in electricity prices in 2023, provide tips on comparing electricity rates to save money, and offer other ways to reduce your energy bill.
Why are energy costs skyrocketing?
Since the onset of the COVID-19 pandemic in March 2020, several factors have contributed to record-high electricity and gas prices in Australia. These factors include:
- Global supply shortages: Pandemic-induced transport disruptions led to shortages in coal and other primary fuel sources worldwide, driving prices up.
- Ukrainian conflict and sanctions: The war in Ukraine resulted in sanctions on Russian coal and oil, exacerbating the supply shortages.
- High inflation rates: Australia’s efforts to avoid a recession following the economic impact of the pandemic have led to high inflation rates, further increasing energy prices.
Projected electricity price rise in 2023:
Following a significant increase in bills during the September quarter of 2022, forecasters predict a further rise in the retail cost of energy in 2023. Compared to pre-pandemic prices, electricity prices are expected to increase by around 56%, while gas prices may rise by 44%. The October federal budget estimates a 30% increase in retail power prices during the 2023/2024 period. Failure to compare electricity plans and find a better deal could result in an average household paying up to $800 more per year.
How to compare electricity plans and find cheaper rates:
If you have been on the same plan for over a year, chances are you’re paying more than necessary for your energy. Follow these steps to compare electricity plans and secure cheaper rates:
- Compare bills: Utilize professional comparison services like CheapBills to save time. Experts will assess electricity rates, off-peak tariffs, solar feed-in tariffs, special offers, and discounts to find the best energy plan from preferred suppliers.
- Moving house: If you’re moving, companies like Move-In Connect can compare plans in your new area, free of charge, and facilitate the new electricity connections.
- Support fundraisers: When comparing bills through CheapBills, you can also donate to an iCause crowdfunding campaign at no additional cost, making a positive impact on a worthy cause.
Additional ways to save on your energy bill:
Once you’ve secured the best plan, consider these tips to further reduce your electricity expenses:
- Solar power: Despite the upfront cost, installing a solar system can lead to significant savings. Explore interest-free loan options through your retailer or solar provider, and select energy retailers offering high solar feed-in tariffs to maximize your earnings from excess power generation.
- Concessions and rebates: Check if you’re eligible for concessions or rebates from your state or territory government. These may be available for concession card holders, pensioners, low-income households, and energy-saving upgrades.
- Make your home energy-efficient: Implement energy-saving measures such as eliminating vampire power, insulating floors/doors/windows, setting timers for heating/cooling systems, running pool cleaners during off-peak times, air drying clothes, using energy-efficient appliances and LED lights.
- Dual fuel and gas: Due to the gas crisis, gas is no longer a cheaper energy alternative. Consider electric appliances, especially if you have solar panels, as they are cheaper to run in the long term.
With the projected 30% increase in electricity prices in 2023, taking action now is crucial. Compare electricity plans to secure better rates and adopt energy-saving practices to minimize your usage. By implementing the right strategy, you can mitigate the impact of price spikes and protect your household budget.