Sunday, 28 June 2020

10 FAQs on switching energy providers


Switching energy providers in Australia isn’t very common. The “Big Three” energy companies still hold 87% of the electricity market and 95% of the gas market in New South Wales, even though competition was deregulated in 2017.

Some energy customers seem to think that switching is too much of a hassle.

While this mindset is understandable, it’s possible that you’re missing out on some savings by sticking with your old energy provider.

The process of switching can seem a bit confusing, though, which is why we answered ten FAQs for you here.

1. Can I Switch Energy Providers?

This may sound like a silly question, but it actually isn’t. Some states regulate energy competition, which means there’s only one option for residents of a particular area.

In other cases, the government regulates energy prices, so switching won’t save you very much money.

The states with full electricity deregulation include South Australia, New South Wales, South East Queensland, and Victoria. Tasmania, Western Australia, the ACT, and the NT either restrict competition or regulate prices, so you may have limited options.

Gas is deregulated in Victoria, New South Wales, South Australia, and Queensland. There is still some level of regulation on price or competition in the rest of the country.

2. Why Would I Switch Energy Providers?

One of the biggest reasons people switch energy providers is to save some money. Aussies who don’t shop around for energy providers in Australia could be leaving money on the table by failing to compare their options.

Saving money might be the main reason people decide to switch, but it’s not the only one. You might be fed up with the billing cycle or customer service of your current energy provider, and decide it’s time to try something new.

Some energy providers offer discounted rates for new customers, which is a strong incentive to switch. Take a look at our comparison tool to find the best deal for your location.

3. Will I Save Money By Switching?

Not everyone is going to save money by switching energy providers. People who live in states with regulated energy prices, for instance, may not save very much by changing provider.

Gas customers in Western Australia, for instance, may not find much savings when they compare gas providers. This is because prices are regulated, so gas companies don’t have the ability to fully compete for your business.

You also may face exit fees when switching energy providers, so you should take that into account before making the switch.

As we’ve covered, price isn’t the only component when it comes to switching your electricity or gas retailer. If you want to find a company with better customer service, you might not mind paying a bit more or making a lateral move.

4. How Much Does Switching Cost?

The cost of switching energy providers in Australia depends on your contract with your current energy provider.

Some companies charge exit fees while others do not. Check the terms of service if you’re not sure whether or not your current plan has exit fees.

Competitive energy markets have more providers than states without much competition. In many cases, this leads to providers that don’t charge you exit fees when you decide to leave.

If you do have to pay an exit fee, though, you should weigh the fee against how much you stand to save by switching.

5. Will I have to Live Without an Energy Connection During the Switch?

This is one of the biggest concerns people have regarding switching energy providers in Australia. The fear of living without electricity or gas for a few days can seem like too much of a hassle.

Thankfully, there should be no interruption when you change energy providers. You’ll need to pay a new company for your energy, but there won’t be a disruption in your connection.

6. How Long Does Switching Take?

Most energy providers will get you up and running within a few days. Of course, this will vary depending on who you select.

We recommend checking with your new provider for a more accurate time frame.

7. Do I Need to Change Plans if I Move?

No, you don’t have to change your energy plan if you move, unless you move out of that provider’s service area. Your provider is not allowed to switch you to another plan or change the conditions of your plan without alerting you first.

Of course, moving homes is a great opportunity to shop for a new energy plan. You can use our comparison tool to find some offers in your new area.

8. What If I Change My Mind?

You will be able to change your mind during the ten-day “cooling off” period. You can back out of the contract during this time without paying any penalties.

This is typically the case for residential customers, but business contracts might have different conditions. Business customers can ask their provider for specific details on cooling off periods.

9. What If My New Retailer Raises Prices?

This is a good question and one that you should investigate before you switch. Some offers are on the table for a limited time only – for example, your rate may only be valid for 12 months before reverting to a different rate.

Check the terms of the new plan to see how long your rates are in place for. If the rates are subject to change, you can re-compare plans at that time to find a better price. Again, consider whether or not any exit fees are associated with your plan before you commit.

10. Do I Need to Get a New Meter?

If you already have a smart meter, you will not need a new meter when you switch energy providers. Some energy plans require a smart meter, so you might need to install one when you change your plan.

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