Is Your Electricity Plan Still Competitive?

• How Competitive Your Energy Plan Is
• Whether Shopping For a New Plan is Worth It
• How the VDO and DMO Can Affect Your Energy Plan
• Common Mistakes People Make When Switching
• What Factors Affect Energy Plan Prices
• How An Energy Broker Can Help

When was the last time you checked your electricity rate? If you’re like most Aussies, you might not have reviewed it in a while—or maybe not at all. It’s just electricity, right? But here’s the thing: the energy market is constantly changing, and staying on the same plan could mean you’re missing out on better value. According to the ACCC findings in 2023, they found that consumers who don’t regularly shop around for a competitive deal experience higher prices. Almost half were paying the Default Offer price or more, and 79% were paying more than the median price offered to new customers. Are you part of this statistic? Let’s break it down and help you decide if it’s time for a switch.

The term “competitive plan” might sound a bit vague to the average energy customer. Does competitive mean the cheapest? Not quite. A competitive energy plan typically gives you the best value—not just a lower cost but a combination of fair rates, inclusive features, and flexibility that’s tailored to your household’s usage, budget, and needs.

First off, yes—rates matter. If you’re paying above the Default Market Offer (DMO) or the Victorian Default Offer (VDO), you’re likely spending more than necessary (we’ll cover more about the DMO and VDO further below). These offers are set as a fair price benchmark, so paying more than this could mean you’re not getting the best deal possible. But, while rates are a big part of it, they’re only one factor to consider. True value comes from a plan that’s built around how you use energy.

One key part of that value is promotions. Many energy providers offer promotional offers or discounts—like getting a one-off discount for signing up, opting for paperless bills via email, or even bundling your electricity, gas or internet together. These discounts can give you a break on costs, but don’t forget: some are introductory offers that expire after a set period, and once they’re gone, you might find yourself paying higher rates. If you’re on a plan with a promotional offer, it’s worth checking when your benefit period is set to end so you understand what rate you’ll be transferred to and how much more you could be paying. 

Next, think about the type of tariff you are on. Tariffs vary, with two of the more common tariffs being flat-rate tariffs and time-of-use (TOU) tariffs. The right tariff for you depends on how and when you use energy. For instance, a time-of-use plan might work well if you’re home mostly during the day or use energy-intensive appliances during the evening. On the other hand, if you’re cycling through energy and using multiple electronics, appliances, and other devices, a flat-rate plan might be more straightforward and predictable. Matching your plan type to your household’s usage profile is an effective way to make sure you’re getting a plan that works for you.

At the end of the day, a competitive energy plan should provide the best value based on your household. The energy market is constantly changing, and so is your energy usage. By regularly checking your plan and seeing what’s out there, you’re not only staying on top of costs but making sure you’re actually getting good value out of every dollar you spend. So, if it’s been a while since you shopped around, maybe now is the time to explore your options and see if there’s a plan that’s truly a better fit for you.

Shopping around and comparing energy plans on a regular basis can make a real difference in how much you pay. The energy market is highly competitive, with new offers appearing all the time. This competition is great for consumers like you because providers constantly come out with new offers to win your business. 

Many energy retailers attract new customers with discounted offers but then gradually increase prices, leaving long-term customers at higher, uncompetitive rates. If you haven’t checked or switched plans in the last year, you could be missing out on a better offer with lower rates, a higher solar feed-in tariff, or even better customer support from the provider. Think of it like car insurance: you wouldn’t pay for a policy year after year without shopping around for a better rate.

If you’ve been with the same provider for a while, you might not be getting the best deal anymore. Many energy plans offer a “benefit period” for new customers, where discounts and promotional rates apply. However, once that period expires, your bill could jump up as those discounts fall off, leaving you with higher rates. For example, you might have signed up for a plan with a generous promotional offer, but after 12 months, that discount might disappear. Suddenly, a bill that was manageable can feel unexpectedly more expensive. The ACCC and Australian Energy Regulator (AER) have found that consumers who compare plans regularly are much more likely to save compared to those who don’t.

The Australian government sets benchmark prices known as the Default Market Offer (DMO) and Victorian Default Offer (VDO) to protect consumers from unfairly high charges. However, these default rates are adjusted annually, and if your current plan exceeds these benchmarks, it’s time to shop around. Regular comparisons can help ensure you’re not paying more than the regulated fair price.

The DMO acts as a safety net for electricity prices, set by the Australian Energy Regulator (AER) to protect households and small businesses from overpaying for electricity. The DMO is relevant in regions like South Australia, New South Wales, and Southeast Queensland. 

In Victoria, there's a similar safeguard in place known as the Victorian Default Offer (VDO). The VDO is managed by the Essential Services Commission, which is Victoria's energy price regulator. The goal of the VDO is simple: to provide Victorian consumers access to a fair energy deal even if they are unable or unwilling to engage in the retail market.

Remember, the DMO isn’t meant to be the cheapest option on the market—it’s only a ‘reference price’ for customers to compare plans. In fact, many competitive energy plans could save you hundreds of dollars compared to the DMO. On the other hand, the VDO is designed to be more competitive, giving Victorian energy customers a better chance of finding fair rates without needing to hunt for deals. If you're looking to save, it's still a good idea to shop around for plans that are lower than these default offers.

Switching electricity plans can seem like a simple way to save money, but many Aussies make costly mistakes that limit their savings—or worse, increase their bills. It’s tempting to assume that any new plan will be better than your current one, but this isn’t always true. 

For one, have you looked into your energy provider’s financial stability? If you’re not following the energy market closely, it’s not necessarily the most exciting topic to explore in your free time. In Australia, several energy companies have gone under in recent years, leaving their customers to find new providers on short notice. The energy market can be unpredictable, and smaller or niche providers sometimes struggle to stay in business, especially when energy prices spike or market conditions change. If a provider goes out of business, it can mean extra stress and effort for customers, from calling around to find a new provider to going through the entire reconnection process again. So, when you’re choosing a plan, it’s worth considering not only the rates but also the provider’s stability.

It’s important to remember that no two energy plans are the same. Sure, energy is energy at the end of the day, but you also need to separate the brand from the utility. Not every provider will offer your particular household a plan that gives you the best value for your money. For example, if you’re an avid movie buff, you could benefit from a plan that offers a free entertainment subscription. Or, if you own a solar system, a high feed-in tariff rate could offset your energy costs—and subsequently lower your bills. Maybe you prefer convenience and want to bundle your electricity and gas with one provider; there are several retailers that offer bundle discounts, which could be a win-win for you. Regardless, the key factor in all of this is understanding your usage profile and how you use energy during a typical day. This lays the foundation for what plan gives you the best bang for your buck.

As mentioned above, comparing energy plans is one of the most effective ways to keep your bills under control. For example, with frequent price fluctuations, sticking to one plan year after year could mean paying more than you need to. By regularly comparing options, you’re better positioned to catch a new, more affordable rate that’s more suited to your needs.

Then there are network fees, which are the costs of maintaining the infrastructure that delivers electricity to your home from generation to consumption. This includes everything from power lines and substations to meter maintenance. Network charges are regulated and vary between states and regions, but they’re often passed onto consumers as part of the overall bill. 

Do you have a solar system? With renewable energy becoming more prevalent and affordable, getting a competitive solar feed-in tariff is a must. It’s worth noting that solar feed-in tariffs and solar plans vary widely between providers. Some plans offer better incentives if you have solar panels, especially if you are a high exporter. With a high feed-in tariff, the energy your solar panels produce and export can actually offset a significant portion of your electricity costs—or even result in credits on your bill. In turn, this can lower your overall electricity bill. Conversely, if you’re still purchasing power from the grid but have an unfavourable rate with a high feed-in tariff, you could be doing more harm than good. High FiT plans are designed to reward households that export a lot of solar energy back to the grid. If you aren’t exporting a significant amount of excess energy, you aren’t taking full advantage of your solar plan. To get the best value, it’s important to match your plan with your energy habits.

Choosing a plan that rewards you for being a high exporter can make your solar investment pay off even faster. It’s another reason why you should be comparing plans regularly, as feed-in tariffs can change regularly. In fact, while some plans offer base FiTs, notable retailers like Origin Energy, Energy Australia, and AGL cater to solar households with exclusive plans that offer even higher rates per kilowatt-hour exported.

If you’ve been googling “Is my electricity plan still competitive?”—chances are, it’s time to check. If you live in a deregulated region of Australia, you have the freedom to choose a competitive plan. So why pay more than you need to? Explore your options so you can get a better deal.

That’s where an energy broker like Electricity Monster can make a real difference. We take the hassle out of comparing energy plans by finding one tailored to your household and usage profile. Are you worried about long, drawn-out phone calls or dealing with filling out paperwork? We make the process easy from start to finish. Best of all, our service is 100% free.

Think of an energy broker as your guide to comparing the best electricity plans in the market. Instead of searching through endless comparison websites or sitting on hold for hours waiting for a representative to take your call, they take care of the process for you right away so you can get a quick solution. If you’ve only switched once or haven’t compared in years, a broker is a great resource to help you navigate the market. 

Why spend time going through confusing details when we can do it for you? Contact Electricity Monster today to get started.